So I’ve always been interested in the Uranium sector and got crushed after Fukushima.
But with recent spikes in the spot price, Uranium looks like a possible buy. Demand is expected to be strong = http://www.world-nuclear.org/info/Facts-and-Figures/World-Nuclear-Power-Reactors-and-Uranium-Requirements/
I’m looking at Denison Mines
Feel free to chime in on the sector or stock
I don’t have a general understanding of the market, but Germany is getting out of nuclear, and France (a huge nuclear producer) is seriously diversifying away from it as well.
Surely that will impact the long-term demand on uranium.
Why would you be short term bullish towards this sector when its alternatives have gotten a lot cheaper suddenly?
This is a pretty simple story for demand growth: China. If they build lots of nuclear as planned, might have something here. If not, this is a dying industry.
The big catalyst right now for uranium stocks is Japan. If they bring their nuclear reactors back online uranium stocks will skyrocket. Abe has talked about the need to do this in 2015, but at sub $60 oil that will never happen. This is a MAJOR stimulis to Japan, who has massively increased their oil imports since the Tsunami disaster. Still, a return to Japanese nuclear power is the largest short term catalyst.
A longer term catalyst happened last year when Russia ended it’s project of pulling uranium out of aging nuclear weapons. This accounted for a major portion of Uranium supplies worldwide. The demand/supply equation for the long term is favorable to suppliers.
Denison mines is a higher risk play compared to someone like CCJ which has long term contracts for supplying uranium. Denison is basically a bet that things will get better sooner than later. CCJ is a bet that consolidation will occur throughout the continued struggles in the uranium market.
As for Germany…they may have shut down their nuclear plants, but they’ve increased the amount of power they get from French nuclear plants.
I was long CCJ for awhile but plan on using the majority of my funds to purchase a house soon, so I took money out of all my long term value bets. For a 3-5 year timeframe, this may be a good bet. If oil goes lower, so will Uranium suppliers.
Never understand why so much hate for Nuclear power. Clean, abudant energy supply, very few disasters.
If people realized how damaging coal is (to produce and to use) they would be pro-nuclear.
I’m guessing your not Ukrainian or Japanese. I understand why folks love Nuclear, and why they don’t want it within 1,000km of their home.
Hopefully 15 years from now we can just be talking about how great these new Thorium plants are.
I would rather have a Nuclear power plant in my backyard than an Oil refiner or a coal-fired power plant.
The amount of people displaced (accidents, killed, poisioned etc) by Coal (#1 source of cheap energy produced in the world) outweighs the number of people impacted by Nuclear by a staggering number.
Not trying to get offtopic 
^ agreed, nuclear power though not perfect is cleaner than many people believe
As Huskie said, it’s all about Japan and bringing back some of their reactors. I know oil being cheap would hurt, but I didn’t realize just how much oil Japan was importing… Uranium then becomes a long oil bet
Germany has one of the most powerful green parties in the western world and they were never going to be a factor for demand growth
China and some of the other BRIC nations are still looking at nuclear as a major supplier for future energy needs. However downgraded growth expectations and Russian geo/political issues can totally change that forecast. On balance, im still slightly bullish.
Bingo! Exactly why I was long in 2011. Thanks for the other insight as well Huskie, good stuff. Going to continue to do some research and see if I want to pull the trigger in 2 weeks or so.
Coal in China is different than coal in America. Nuclear can f’ up anywhere. I agree there are environmental issues with all forms of electricity production but Nuclear tends to be the most globally catastrophic. The potential for something like Fukushima to render all of Japan uninhabitable is much higher (albeit remote), then a single coal plant doing the same.
China drives this money train but there are too many unknowns to be long uranium right now.
Some of you are underestimating the energy requirements of the emerging world. These are not either / or situations .
We are taking about 3 billion people getting on the grid when their populations stabilize. Coal, hydrolectric, alternate, oil is not going to be able to satisfy their demands and they have recognized this with ambitious plans in place for nuclear energy.
It’s true a single coal plant couldn’t possibly make as large of an impact as a nuclear power plant melting down. Some may agrue the aggregate impact from continued use of coal is globally catastrophic, making the entire planet uninhabitable.
^ I would agree. But people don’t think on aggregate, they think of themselves at the margin. And I’m sure most people would rather locate next to coal than nuclear. And in a world full of protests, intervention and court challenges, that matters. Just wait until Chinese start going all NIMBY.