Uranium Week: Cold War

Weekly Reports | Nov 27 2018

Longview Economics provides technical, fundamental and military reasons to be bullish uranium.

-History suggest price retracement
-China drives nuclear power demand
-US-China tensions drive nuclear arsenal build-up

By Greg Peel

From 2001 to 2007 the spot uranium price rallied 175% from US$7/lb to US$136-138/lb to mark one of the biggest asset price bubbles in recent history, Longview Economics notes. From that level to the 2016 trough it fell -89%.

In that time, the number of uranium mining companies has fallen from over 500 to just 20 currently. Rather than investing in future capacity, miners are shutting down capacity given the average cost of production is above the current spot price. A deteriorating supply outlook from other miners leads Longview to suggest a total loss of -17% of supply by 2020.

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