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Justin Huhn: Fundamentals for an Epic Uranium Bull Market Stacking Up

Justin discusses why he finds the uranium market to be compelling, particularly as a contrarian investor. Uranium is driven through long-term contracts with nuclear utilities and those contract prices tend to be higher than current spot prices. Investors tend to watch the spot price since it is updated frequently; however, volume in the spot market is typically quite low. Utilities tend to renew contracts during specific periods when prices are moving higher.

Justin explains how the SWU price is essentially the cost of the enrichment process. Centrifuges are expensive and difficult to shut down, so instead, they are usually continuously operated, which can create excess supply.

Uranium is a very different market, and during the last bull market, there was a period of supply disruption that resulted in additional contracts being renewed. Today there is a developing structural supply deficit between what is being mined and consumed. The market is steadily growing, with new reactors coming online in over a dozen countries. This is all leading to a robust outlook for the latter part of this decade.

Section 232 established a working group on uranium, and their recommendations are still pending. Also, concerns are surrounding the possibility of mine closures due to coronavirus.

KazAtomProm’s strategy has changed, resulting in less downward pressure on prices. They have been very good at sticking to their word. They remain the lowest cost producer in the world and have numerous agreements with various countries and utilities. Currently, they are mining at a minimal level sufficient to fulfill their contracts.

Lastly, Justin outlines what to look for in a responsible uranium producer and why few companies meet his criteria.

Time Stamp References:
0:40 – How Justin became interested in uranium
2:00 – Spot price versus long-term contracts.
6:20 – SWU Pricing explanation.
9:40 – How this bull market will be different.
13:30 – Section 232 and pending proposals.
16:30 – KazAtomProm and their new approach.
18:40 – Assessing management teams.
21:30 – Appia Energy and rare earth metals.
24:30 – Nuclear energy information resources.
25:20 – Resourceful connections on Twitter.
27:40 – Overall picture short-mid term.

Talking Points From This Week’s Episode
• Why uranium is a compelling contrarian investment.
• Spot price versus long-term contracting pricing
• Underfeeding and supply.
• Structural deficits and mine shutdowns.
• KazAtomProm strategy and market effects.

Justin has been researching the uranium market for the past four years and has thousands of hours of research under his belt. He has been trading the markets for close to a decade, having learned to invest with technical trading – more specifically, trend-following. He was taught by a long-time veteran momentum trader who took him under his wing. This combination of in-depth fundamental analysis in the uranium sector and experience with technical analysis gave birth to the Uranium Insider Pro newsletter.

Justin is a passionate educator who cares deeply about bringing value to others, in the investing world and otherwise. He brings a unique, caring dedication to his clients and associates.

Uranium Insider has been an incredible experience of community, and a once-in-a-lifetime opportunity to share and grow with his subscribers and fellow contrarian investors.

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