Why New Supply Is Hard to Grow

Stijn Schmitz welcomes Justin Huhn to the show. Justin Huhn is Founder & Publisher of Uranium Insider Pro. In this comprehensive discussion, Huhn provides an in-depth analysis of the current uranium market, highlighting its unique supply and demand dynamics. The uranium market is currently experiencing a significant bull run, with demand projections showing substantial growth. The World Nuclear Association’s 2025 reference scenario indicates uranium demand could be 50% higher by 2040 compared to 2019. Key demand drivers include electricity growth, clean energy mandates, and energy security concerns, with nuclear energy capacity projected to grow at approximately 4% annually.

On the supply side, the market faces critical challenges. Major producers like Kazatomprom are struggling to maintain production levels, with most existing mines experiencing declining output. Huhn emphasizes that the industry needs substantially higher prices – potentially over $100 per pound in the term market – to incentivize new project development. The market’s structure is characterized by limited supply and rising prices, with trading volumes declining. Utilities remain cautious, often underestimating future price trajectories. Potential secondary demand drivers include financialization, strategic sovereign stockpiling, and utility inventory restocking.

Huhn is bullish on uranium’s long-term prospects, suggesting the market is still in early to mid-stages of its bull cycle. He recommends investors diversify their approach, potentially holding physical uranium through vehicles like Yellow Cake or Sprott Physical Uranium Trust, and maintaining a diversified portfolio of mining stocks.

Regarding potential disruptors, Huhn is optimistic about thorium’s long-term potential but doesn’t see it impacting the current uranium cycle. He’s also measured about small modular reactors, believing the focus should remain on building large, proven nuclear reactor designs. For investors interested in the sector, Huhn suggests carefully selecting companies with responsible management, strong capital positioning, and potential for future cash flow generation.

Timestamps:
00:00:00 – Introduction
00:01:00 – Uranium Bull Cycle Position
00:02:15 – Nuclear Demand Growth Drivers
00:04:21 – Supply Demand Modeling
00:06:23 – Market Uniqueness Factors
00:07:27 – Bull Market Innings Outlook
00:10:18 – Key Uranium Producers
00:17:48 – Supply Bottlenecks Challenges
00:22:36 – Incentive Price Discussion
00:25:29 – Spot vs Term Market
00:28:48 – Future Demand Projections
00:36:35 – Geopolitical Market Bifurcation
00:39:28 – Thorium and SMR Disruptors
00:45:19 – Portfolio Construction Advice
00:51:00 – Concluding Thoughts

Guest Links:
Website: https://www.uraniuminsider.com
Newsletter: https://www.uraniuminsider.com/newsletter
X: https://x.com/UraniumInsider

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.