Justin Huhn: Inflation is Hitting Uranium Producers Hard
Tom welcomes back Justin Huhn to discuss everything uranium related. The recently passed Inflation Reduction Act does have some provisions that will be beneficial for the Nuclear industry. It includes some tax credits which should help keep existing reactors operational for longer. Some nuclear projects are aging and have higher overhead at times. Maintenance costs may get covered by this bill.
Justin explains the benefits of pricing transparency that the Sprott SPUT ETF has brought to the market. In addition, they’ve helped buy up the excess inventory. He believes SPUT is going to outperform again as institutional buyers have been accumulating.
There have been logistical problems with deliveries from Kazakhstan due to supply route problems around Russia.
Everything is experiencing a rising cost of doing business, including uranium production and enrichment. This will inevitably lead to higher prices for uranium.
Japan is still cautiously restarting reactors to ensure their safety. It’s a slow process, but the public is coming around to the idea and local governments are generally supporting it.
There has been a decade of under-investment in nuclear within France. They’ve had maintenance problems and the current fleet is running at fifty percent. They are a large exporter of energy, but there are some concerns about what will happen this winter. Hopefully, they can bring more power back online. They have also had issues with drought and water is needed to keep reactors cool. Nuclear is clearly showing that it’s a reliable form of energy. We’re not sure what is happening in Germany, as electrical prices remain at record levels.
Russia doesn’t want a nuclear accident in Ukraine, but they want control of that massive nuclear plant. It provides twenty-five percent of Ukraine’s grid. While there are concerns about the potential for sabotage, these are very reinforced structures and shouldn’t be vulnerable.
All markets are slow this time of year and this has spilled over to fuel buying. He explains why the market should improve later in the fall.
The uranium market is bifurcating into East and West. This could provide an impetus to extend the length of the bull market.
He believes it may only be a matter of weeks before the next big leg-up in uranium.
Time Stamp References:
0:00 – Introduction
0:40 – Inflation & Green Policy
2:47 – Reactor Economics
4:32 – Sprott SPUT
10:25 – Ukraine Conflict Effects
14:13 – Uranium Price Floor
15:50 – Japanese Restarts
22:13 – Ukraine Nuclear Plant
25:42 – Summer Doldrums
28:00 – Enrichment Pricing
34:29 – M&A Activity
36:04 – Bull Market Factors
38:03 – SMR Momentum Building
41:32 – Wrap Up
Talking Points From This Episode
- Benefits to the nuclear industry from the “Inflation Reduction Act”.
- Importance and benefits of the SPUT ETF.
- Japan’s reactor status and the overall energy picture in Europe.
- Why the Uranium market is becoming bifurcated and the implications.
Shika 2 Hitachi Nuclear Project: https://youtu.be/w2YHrJafMlE
SMR Story: https://segracapital.com/commentary/the-advanced-nuclear-fuel-cycle-we-can-work-it-out/
Justin is the Founder and Publisher of the Uranium Insider Pro Newsletter. Through the combination of rigorous fundamental analysis and Justin’s thorough understanding of technical analysis, determinations are made for select companies to be included on Uranium Insider Pro’s “Focus List,” as well as the most opportune times for entry or exit.
Justin is frequently asked to offer his commentary on various media forums, including Crux Investor, Smith Weekly, Palisades Gold Radio, Mining Stock Education, and Mining Stock Daily. He also regularly participates in the post-earnings commentary that is broadcast immediately after industry majors release quarterly earnings.
Justin is devoted to bringing value to those that are taking their first look at the uranium sector. Until July 2020, he distributed a complimentary newsletter as an educational tool to those investors seeking to familiarize themselves with the complexities and opportunities offered by the uranium sector and the uranium shares. Regrettably, the Uranium Insider Pro subscription letter’s subscriber growth and breadth no longer allow him to provide this tool.
The success of Uranium Insider has been gratifying, and the emerging bull market in uranium continues to offer an unusually attractive risk:reward proposition for fellow contrarian investors.