Macro Voices MacroVoices #474 Mike Alkin: Uranium Supply Is In Structural Deficit And The Fuel Buyers Don’t “Get It”!
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Apr 3, 2025 Mike Alkin, co-founder of Sachem Cove Capital and uranium market expert, dives into the surprising negativity in investor sentiment despite strong nuclear energy news. He discusses the structural supply deficit in the uranium market, revealing crucial insights on how geopolitical factors and utility company dynamics shape pricing. Alkin sheds light on the complexities of uranium contracts and the potential for a short squeeze. The dialogue highlights the need for strategic investment approaches in an evolving landscape and navigates the balance of short-term volatility versus long-term potential.
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Uranium Market Dynamics
- The spot uranium market, representing only 25% of the total market and driven by traders, doesn't reflect true supply-demand dynamics.
- The term market, where utilities contract long-term, reveals a different picture with rising prices.
Nuclear News vs. Market Reality
- Bullish nuclear news focuses on future demand, while current uranium market dynamics are driven by existing reactor needs.
- The term market, reflecting actual supply contracts, shows prices at a 17-year high, indicating a disconnect.
Impact of Reactor Restarts
- Reactor restarts, though positive for the nuclear industry, are not the primary drivers of uranium demand.
- Utilities secure fuel through contracts 3 years in advance, and restarts represent a relatively small portion of overall demand.