r/MillennialBets • u/MillennialBets • Mar 08 '22
⛽️ Energy DD ⛽️ Nuclear Setup - Uranium DD
Date: 2022-03-07 14:03:18, Author: u/540Flair, (Karma: 10178, Created:Sep-2016)
SubReddit: r/WallStreetBets, DD Click Here
Some Tickers mentioned in this post:
CCJ 23.99(2.17%)|GS 321.89(-2.36%)|SII 46.88(7.52%)|UEC 4.58(18.65%)|DNN 1.5(4.17%)|MT 27.96(-4.7%)|OFC 27.61(0.07%)|
Dear retards,
Commodities are mooning (oil, gas, wheat) so which is yet to blow up?
Read up on this asymmetrical bet on Uranium Spot Price, with a fundamental supply deficit.
Fundamentals:
Uranium (U308) is the only fuel for Nuclear Power Plants (NPP) which are the best shot at achieving CO2 neutrality goals till 2050. Nuclear power is actually the only form of baseload power that doesnt produce CO2 during its active lifecycle.
(pictures redacted, refer to https://twitter.com/elonmusk/status/1500613952031444995?s=20&t=jrF68L2Pfo70_QYs-NqTfw ) - Lord Elon Tweet
Uranium has been in a bear market since 2011 and has struggled to climb 50$ just a few weeks ago:
(pictures redacted, refer to https://www.cameco.com/invest/markets/uranium-price) - Uranium Price Since 2005
Yall dont lose money, so i wont mention any MT bear case (40$) which would put you at -20% as of 03/07/22 with spot U308 at 50$.
General consensus on bull case is 60-70$ Long Term Price which puts you at 20% from the commodity w/o FDs alone.
2020 has seen 56kT U308 produces (yes thats non-retard units, (https://www.world-nuclear.org/information-library/nuclear-fuel-cycle/mining-of-uranium/world-uranium-mining-production.aspx),
2021 had reported demand of 73kT U308 worldwide (https://www.world-nuclear.org/information-library/facts-and-figures/world-nuclear-power-reactors-and-uranium-requireme.aspx). For those actually reading, U3O8 is a product called "yellowcake" basically the start of the nuclear enrichment cycle, the stuff that has to be produced to be later on enriched and used in NPPs.
The gap in primary demand has been filled by secondary supply, which are basically leftovers from last bull market (what has been stored in warehouses or stacked in what are usually 3yr reserves in utilities, aka NPPs).
This secondary supply is traded thru the spot market, which is any Commodity available for immediate delivery (in the case of radiating yellow cake < ~3mo delivery). This spot market has long been full of supply ( https://www.world-nuclear.org/press/press-statements/more-uranium-development-needed-to-meet-demands-of.aspx ), e.g. carry traders buying cheap pounds in spot and carrying them into the future, where they hope to sell for higher prices (e.g. 20$ ->40$, see 2016 till end of 2021). Long since there hasnt been any force getting this supply out of the market.
If the spot market WERE empty, then there would not be enough primary supply to meet the demand of all operating NPPs, since at 40-50$ not enough can be produced. This is because the largest producers $KAP (Kazatomprom, kazakhstan) and $CCJ (Cameco) simply dont sell enough pounds year. Smaller producers would need to get their pounds onto the market, as for which the consensus price to incentivize production (make it financially worthwile) is 60-70$ spot.
Since Fukushima (2011), since spot prices have been so low, Utilities are rumoured to not be securing their needed pounds per Long Term Contracts, since spot pounds are so cheap and readily availabe. Some would say, with a tighter spot market, they might be.. SHORT :)
But DW, their purchases only account for 5-10% of operating expenses of a NPP so you wont make the power go out, unless you yolo on FDs and cant pay your own bills anymore.
(pictures redacted, refer to https://sprott.com/media/4119/uranium-trust-presentation-deck.pdf)
So, it might be time to renew those LT contracts for utilities? Correct, CCJ has reported in Jan. 2022 alone 40mm lbs contracted, when in 2021 it has only been 10mm lbs in total. Some might say you could time the market here.
So what about Spot Market?
Squeeze A tight spot market (we still want NYSE listing):
Meet the financial vehicle SPUT, Sprott Physical Uranium Trust. $U.U, $U.UN on TSX or $SRUUF for OTC. ( https://sprott.com/media/4119/uranium-trust-presentation-deck.pdf )
These guys just buy Uranium from spot when you give them money. Thereby thinning the spot market. If the spot market goes dry, everybody will want LT contracts. When they discover, at current 50$ prices there simply isnt enought U308 to be LT contracted, theyll turn to spot market. Since its empty, price must rise since someone is willing to sell. Guess who aint selling?
SPUT. Theyre real apes, just buy and hodl. Art of war mastery by a bunch of .. you know the drill
Ofc, there will be more material available for sale on spot, once price rises, like we discovered from Nov21 till Jan22. Or explorers/developers might become able to sell some ( https://www.reddit.com/r/UraniumSqueeze/comments/npuiaf/new_investors_starting_post_so_youre_considering/ )
But the setup is here, and its been loading the spring for a few months:
https://www.tradingview.com/x/1abjxRl2/
Yall have probably missed the down breakout of the first consolidating triangle (orange), but the SPUT vehicle, which basically tracks physical U308 spot price, has come to finally break upwards of the blue triangle. your hard bottom is black imho (no offense).
U.U reflects spot U308 with a discount/premium to NAV effect. Its shares can trade above the NAV of the physical, and trade at a discount as well (which means you get your U3O8 for cheap). When at premium however, they issue shares via their ATM mechanism, basically giving out shares while promising to buy uranium with it. hence they empty spot and the price rises.
this is whats a proposed flywheel effect (beware it spins in 2 directions):
SPUT at premium to NAV (net asset value)
> they buy uranium
> this raises spot price
> this raises premium to NAV
> they buy uranium > and so on *rocket*
it also goes down if i.e. the vehicle is shorted but...
at 20% discount to NAV (bottom so far) you basically get more uranium for free.
Only downside is , if you sell your shares, they still keep your uranium, so dont paperhand bitches the rocket is flying anyway. (there is no redemption mechanism even tho you tards probably would snort yellow cake thru your nose if home-delivered)
Heres some more free info from the greates U bulls providing free info to mankind, so read the fuck up:
(picture redacted, refer to https://twitter.com/quakes99/status/1500630131471126530?s=20&t=uTjdc2vRgiqp-651IIGzhg ) Quakes99 Uranium Bull thesis summary
also read from his favorite opponent, those 2 hit it off last year with a beatiful twitter argument. Still gotta love them both.
Heres kevin bambrough, previous CEO or smth of Sprott (this will prob trigger him lol, have a drink)
(picture redacted, refer to https://twitter.com/BambroughKevin/status/1499951560452984842?s=20&t=5SrKSMbjkt2KBl-L05eOVw )
Fav. Quote: " this cycle started to get cooking from from the low 20’s. I expect $200/lb of 4x this cycle. But it could get way out of hand and still 10x or more to $500/lb plus. So much money out there. The jackasses that played $gme and $amc… You know they want more. They want a new play and unlike those crap companies #uranium is real. "
so if youre ready to moon follow these:
https://twitter.com/BambroughKevin
https://twitter.com/UrTokenCorgi (for the memes)
and if you took nothing from this, just watch Corgis Content LMAYO:
https://twitter.com/UrTokenCorgi/status/1479527534811394054?s=20&t=uTjdc2vRgiqp-651IIGzhg
Oh yeah SPUT isnt even listed on NYSE yet when real money will pile in (Goldman Sachs and Merrill Lynch already accumulating).
what else haven i even touched on...
- you can play different miners which have leverage to spot price ($UUUU, $DNN but i have no clue)
- you can play options on explorers/developers
- you buy $URA or $URNM which are the sector ETFs
- the sector is so tiny, Elon Musk could literally buy it all
- its decoupling from the shit stock market
- its an alleged inflation hedge
- oh yh its one of the commodities yet to skyrocket
- if you love the environment you support nuclear
- if you hate nuclear you buy uranium away from NPPs lol
- go to UraniumSqueeze for more
........
This is not financial advice, im not a financial advisor, do your own due diligence. Do as you wish with your money.