Reddit – Dive into something


Hello everybody,

Right here some longer lecture to find a brand new sector.

Take your time the approaching days and coming weekend to verify the content material and the used sources.

This is not monetary recommendation. By no means rush into investments. All the time take your time to do your personal DD earlier than investing.

I am a long run investor

The thought of this lengthy an detailed put up is to assist to eliminate a false impression

Many individuals in Western Europe and North America nonetheless suppose that world nuclear energy era is lowering, however in truth 12 months after 12 months the worldwide nuclear energy era will increase and the final 5 years an necessary shift to extra use of nuclear energy (besides in Germany and Belgium) than beforehand anticipated has began to happen via licence extensions everywhere in the world (USA, Canada, FR, Japan, …) and an acceleration in new nuclear energy reactor constructions (China, India, Russia, France, UK, USA (SMR’s), UAE, South Korea, Japan, Turkey, Egypt, …)

Be aware: I discover that I can not put up photographs right here, so I needed to work with loads of hyperlinks to pictures and graphs.

Have a look at the graph on the finish of this text: https://stockhead.com.au/sources/here-are-five-reasons-why-uranium-is-about-to-boom/

World Nuclear Electrical energy Manufacturing: https://world-nuclear.org/information-library/current-and-future-generation/nuclear-power-in-the-world-today.aspx

A. NEW REACTOR CONSTRUCTIONS:

Within the Western world we do not discover it but, however loads of new reactors are being construct and deliberate for future development begins as we communicate.

Grid connections, new development begins and closures in 2022: https://world-nuclear.org/information-library/facts-and-figures/reactor-database-guide.aspx

World Reactor database with most up-to-date knowledge about grid connections, new development begins: https://world-nuclear.org/information-library/facts-and-figures/reactor-database.aspx

Supply: World Nuclear Affiliation

Overview of all nuclear reactors in development as we speak and their deliberate grid connection: https://www.world-nuclear.org/information-library/current-and-future-generation/plans-for-new-reactors-worldwide.aspx

Supply: World Nuclear Affiliation

Many individuals suppose that nuclear reactors at all times take greater than 10 years to construct and go nicely over funds on a regular basis.

However the actuality is totally different.

Sure, the few new reactors construct currently within the Western World (Vogtle items 3 and 4, …) went nicely over funds and over time, however the reactors construct in China, India, UAE are construct in ~6 years time and near funds.

Hyperlink to Graph about all reactor constructions worldwide for the reason that begin of use of nuclear energy: https://www.reddit.com/r/nuclear/feedback/ofwa7c/nuclear_reactor_construction_first_concrete_to/

Supply: IAEA

Why that distinction?

When constructing many reactors in Western World in 1970-1985 the USA, France, Canada, … had been in a form of “Meeting line work” mode (Fleet mode development) the place totally different development work teams went from one development website to the subsequent development website which made the development extra environment friendly.

Immediately China and India are in that very same state of affairs (fleet mode development) as the Western World was 1970-1985, whereas the Western World misplaced that workforce with expertise in setting up reactors.

Hyperlink: Scroll down to seek out the graph about “China nuclear energy plant development”: https://world-nuclear.org/information-library/country-profiles/countries-a-f/china-nuclear-power.aspx

Supply: World Nuclear Affiliation

By consequence the few new massive reactors construct in Europe and the USA for the time being take way more time, as a result of the workforce/engineers has to reinvent that data. That very same workforce will develop into increasingly environment friendly at future reactor constructions as soon as once more.

Chinese language massive transfer on nuclear reactor construct out

Western world (USA, EU, South Korea, Japan) has an growing provide safety challenge on totally different commodities, one in all them is uranium.

Why?

China is considerably growing their uranium consumption in coming years, whereas many western international locations are making U-turn on the usage of nuclear reactors by extending the operational licence of many current reactors (USA, Canada, France, …) and pushing for brand new reactors constructions sooner or later (a pair massive reactors and loads of SMR’s)

The 150 extra massive nuclear reactors that China goals to construct from 2021 to 2035 will on their very own improve the worldwide uranium consumption by 30%.

Add to that the extra uranium demand from all the brand new future non-chinese reactors which might be being construct for the time being and within the close to future (India, Russian, Turkey, Egypt, South Korea, … USA (SMR’s), Poland, …)

However even uranium traders are significantly underestimating the uranium provide insecurity of China and the share of world uranium manufacturing that China will wish to declare for themself for 200 Chinese language reactors.

China desires to safe uranium:

a) for 150 new first cores (one new reactor core of a 1000MW reactor wants ~1,450,000lb, one 1200MW reactor wants ~1,700,000lb U3O8)

hyperlink: https://thediplomat.com/2022/09/powering-chinas-nuclear-ambitions/

New nuclear reactors deliberate (scroll down to seek out the overview): https://world-nuclear.org/information-library/country-profiles/countries-a-f/china-nuclear-power.aspx

Supply: World Nuclear Affiliation

b) they should renew previous long run provide uranium contracts signed in 2005-2008 which might be coming to their finish for the time being.

c) to construct up their very own strategic reserve for their very own power safety.

Have a look at slide 20: https://www.kazatomprom.kz/storage/c3/kap_investor_handout_3q.pdf

Supply: Kazatomprom presentation

1 ton U3O8 = ~2204 lb U3O8 (uranium)

1 ton U = 2600 lb U3O8

=> 23,000 tU = ~ 60 million lb U3O8 solely as a strategic reserve

Added to that the wanted uranium:

– for the brand new 150 chinese language new cores (moste future reactors are 1200MW reactors) = 150 x ~1,700,000lb U3O8/ new core = 255 million lb U3O8

– annual consumption of the present chinese language reactors: one 1000MW reactor consumes ~450,000lb/12 months

Examine this with the whole world uranium manufacturing 2022 of ~135 million lb U3O8

Quickly Kazatomprom and Cameco :“Sorry western utility, we have now much less future uranium manufacturing out there for you, China took extra”

After Kazatomprom/Cameco/Orano, China is Langer Heinrich (Paladin Power, CNNC requested to restart the mine as quick as potential & just lately CNNC purchased 26% of the uranium manufacturing of Langer Heinrich of 2023/2024/2025), Rossing (purchase all uranium as a substitute of leaving an element for western utilities), Kayelekera (Lotus Power), DASA (World Atomic), …

World Atomic (GLO), Power Fuels (UUUU), UR-Power (URG), EnCore Power (EU) and Paladin Power (PDN) are signing uranium provide contracts with utilities as we communicate

United Arab Emirates has 4 reactors as we speak, the final one is sort of 100% construct

hyperlink: https://www.world-nuclear.org/information-library/country-profiles/countries-t-z/united-arab-emirates.aspx

Supply: World Nuclear Affiliation

India can be growing the variety of reactors they’ll construct the approaching years

hyperlink: https://www.power-technology.com/information/india-nuclear-plants/

Hyperlink: scroll down to seek out the overviews : “Reactors below development in India” and “Energy reactors deliberate” : https://www.world-nuclear.org/information-library/country-profiles/countries-g-n/india.aspx

Supply: World Nuclear Affiliation

These “2022?” will most likely be unfold over 2023-2025, like UAE did (fleet mode development): development begin of a pair in 2023, adopted by a pair in 2024 and the final development begins in 2025.

B. MANY U-TURNS IN FAVOUR OF NUCLEAR ENERGY RECENTLY

When Fukusihma nuclear accident occurred all 54 Japanese reactors had been shutdown in 2011-2013 and remained shutdown for a few years. Immediately nonetheless, Japan made an enormous U-turn on that topic:

– as we speak 10 Japanese reactors are again in service

– {the japanese} authorities desires to restart many different japanese reactors by Summer time 2023 (I anticipate it should take a bit longer, so for example by early Winter 2023): https://oilprice.com/Different-Power/Nuclear-Energy/Japan-Plans-To-Restart-Seven-Nuclear-Reactors-By-Summer time-2023.html

Right here an replace of January 5, 2023: https://twitter.com/wang_seaver/status/1610806358299013120

– Japan desires to increase the operational licence of many japanese reactors (=> extra surprising uranium demand): https://www.bloomberg.com/information/articles/2022-11-28/japan-studies-plan-to-extend-life-of-60-year-old-nuclear-plants?sref=z77yHwwS&utm_content=power&cmpidpercent3D=socialflow-twitter-energy&utm_campaign=socialflow-organic&utm_medium=social&utm_source=twitter&leadSource=uverifypercent20wall

– Japan desires to construct new reactors

hyperlink: https://thediplomat.com/2022/11/japans-changing-nuclear-energy-policy/

Constructing new western reactors will take 7 to 10 years, you’ll say. However look what they wish to do in following article:

hyperlink: https://twitter.com/quakes99/status/1596375846696390656

Supply: John Quakes on twitter

Japan desires to switch reactors on current nuclear plant websites whereas preserving the present infrastructure of as we speak. It will make the development of a brand new working reactor a lot much less longer.

3 months in the past Japan utilities met with Cameco to debate their future uranium wants, as a result of their uranium stockpile reached a vital low degree, like in lots of different international locations with nuclear reactors.

South Korea additionally made a U-turn just lately: https://pulsenews.co.kr/view.php?sc=30800028&12 months=2022&no=770043

USA is placing everyting in place to assist the long run large construct out of SMR (Small Modular Reactors) within the USA, whereas extending the operational licence of current reactors:

hyperlink: https://spectrum.ieee.org/nuclear-power-plant

Different international locations making a U-turn in favour of nuclear energy are UK, FR, …

All of the U-turns and introduced operational licence extensions of current reactors the final 5 months resulted in an ADDITIONAL ~10,500,000 lb ANNUAL uranium demand in comparison with a complete world uranium manufacturing of 135,000,000lb in 2022.

Additionally: https://www.brookfield.com/insights/new-dawn-nuclear-power

C. THE GLOBAL URANIUM SUPPLY SIDE

In 2022 the worldwide uranium manufacturing will solely attain 135Mlbs. And solely with a major increased uranium value in Q42022 than as we speak (~49USD/lb), the uranium sector may possibly attain 155Mlbs world manufacturing in 2023.

However the annual uranium demand in 2022, earlier than the ~10,500,000lb of surprising extra ANNUAL uranium demand (July, August, September and October 2022 bulletins) is 190-200Mlbs (major demand + first influence of overfeeding in 2022) which reduces operational inventories of producers, convertors and end-users (utilities).

=> That is a defict of ~75Mlb in 2022 (200+10-135) and based mostly on my estimates once more a deficit of ~70Mlb in 2023 (200+15+10-155)

These operational inventories at the moment are at a vital low degree in response to UxC (presentation in 1H2022), which means that there’s no room anymore to scale back operational inventories additional. So now utilities successfully want to seek out ~190Mlbs out there! However the place precisely?

Immediately the uranium spotprice is ~49USD/lb, whereas the uranium sector wants 80USD/lb to extend manufacturing to have the ability to get world uranium provide and demand in equilibrium once more a pair years after reaching these 80 USD/lb (As a consequence of additional inflation, quickly 90 USD/lb will likely be wanted as a substitute of 80 USD/lb)

Now comes the time that this will likely be translated in a lot increased upward stress within the uranium market (This occurs progressively, not in a single day. I am a long run investor)

And as a result of the pure uranium price solely represents ~5% of complete manufacturing price of electrical energy from a nuclear reactor, utilities is not going to thoughts to purchase uranium above 100 USD/lb if wanted, as a result of the price of shutting the reactor down as a result of gas scarcity will price a lot extra for the utility than paying 2 instances the uranium value of as we speak

Clarification:

Complete electrical energy manufacturing price of electrical energy from nuclear reactor with 50USD/lb uranium value = 100

Complete electrical energy manufacturing price of electrical energy from nuclear reactor with 100USD/lb uranium value = 100+5=105

That is solely a rise of 5% of complete electrical energy manufacturing price.

Pure idea, this is not a value goal: Complete electrical energy manufacturing price of electrical energy from nuclear reactor with 300USD/lb uranium value = 100+(7*5)=135. (Nonetheless cheaper than within the case of a doubling of the gasoline value (see decrease))

Be aware:

Complete electrical energy manufacturing price of electrical energy from gasfired energy station with 50EUR/Mwh gasoline value = 100

Complete electrical energy manufacturing price of electrical energy from gasfired energy station with 100EUR/Mwh gasoline value = 100+70=170

That is already a rise of 70% of complete electrical energy manufacturing price.

Complete electrical energy manufacturing price of electrical energy from gasfired energy station with 300EUR/Mwh gasoline value = 100+(5*70)=450 => massive downside!

And in a pair years some current uranium mines of as we speak will likely be depleted and can want alternative by new uranium mines. However these new uranium mines want a few years of development and better uranium costs than as we speak.

Conclusion: The uranium value is about to extend considerably and as a result of world threat off mode of investor on the worldwide stockmarket as we speak the uranium mining firms are once more very low-cost and have an enormous upside potential in coming months and couple years. And the market at all times anticipates.

This is not monetary recommendation. Please do your personal DD earlier than investing.

If :

a) Sprott Bodily Uranium Belief (U.UN on the TSX and SRUUF on US inventory change) is an funding in bodily uranium (no uranium on paper!) with out being uncovered to the mining dangers

U.UN share value at 16.50 CAD/share represents an uranium value of ~49.00 USD/lb.

Right here the hyperlink to the fairness analysis report about Sprott Bodily Uranium Belief: https://twitter.com/quakes99/status/1599475875153870848

Supply: John Quakes on twitter

Whereas the uranium sector wants 80USD/lb to extend manufacturing to have the ability to get world uranium provide and demand in equilibrium once more a pair years after reaching these 80 USD/lb.

And if the inflation stays excessive in 2023, quickly 90 USD/lb will likely be wanted as a substitute of 80 USD/lb.

The wanted 80 USD/lb and 90 USD/lb are based mostly on:

– the worldwide manufacturing price curve evaluation in comparison with the worldwide annual uranium consumption;

– Cameco in Could 2022: “If the nuclear sector desires us to restart are US property, than we are going to want 80 USD/lb uranium promote value”

– Amir, CEO of UEC, when uranium value was ~50 USD/lb mentioned: “Utilities must pay a lot increased uranium costs for US manufacturing. -> However these increased manufacturing price uranium mines are wanted to shut the uranium provide hole! => If no considerably increased uranium costs => no Uranium manufacturing => Not sufficient uranium for all utilities.

– Ben Finegold of Ocean Wall on October 7, 2022: “Time period contracting ~90-100 USD/lb” “We’ve seen break even costs as excessive as 90 USD/lb”

– …

2) Yellow Cake (YCA on london inventory change) at an uranium value of solely ~47.2 USD/lb (= YCA share value 396.3GBp/share), whereas transactions are occurring now above 60USD/lb and even already 70USD/lb

Right here a hyperlink to the NAV worth of Yellow Cake and their low cost in comparison with NAV worth: https://docs.google.com/spreadsheets/d/1SdQ0pXhW2KJ_PJoiJ3w97tzVz1fGcupAU9bfpTJkOHw/edit#gid=2006377867

c) Sprott Uranium Miners etf (URNM etf): nicely diversified 100% uranium sector etf

Supply: The Bear Traps Report December 4th, 2022, posted by John Quakes on twitter: https://twitter.com/quakes99/status/1603034945664200709

Be aware: The Bear Traps Report is knowledgeable report learn by 600 institutional traders (banks, hedge funds, …)

The holdings of Sprott Uranium miners etf (URNM etf): https://sprottetfs.com/urnm-sprott-uranium-miners-etf/

=> European different: URNM.L on London inventory change = HANetf ICAV – Sprott Uranium Miners UCITS ETF

d) World X Uranium etf (URA etf): 70% invested within the uranium sector

=> European different: URNU.L on London inventory change = World X Etfs Icav – World X Uranium Ucits ETF

e) Particular person uranium firms: In case you are on the lookout for particular person uranium firms, you may take a look at the holdings of Sprott Uranium Miners etf

This is not monetary recommendation. By no means rush into investments. Take your time to do your personal DD earlier than investing.

I am a long run investor

Cheers





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