The strong recent performance of uranium stocks has caught Wall St.’s attention, with a growing narrative taking hold of an heavily skewed supply/demand imbalance leading to ever stronger uranium prices, the product of years of lowered production and dwindling inventories colliding with growing demand mandated by green policy initiatives from governments. To me, the jury is still out as to whether there will be a concerted policy turnaround in the developed world towards nuclear policy (ex-France) after so many years of underinvestment and mothballing of reactors, not to mention the scarring of public perceptions from accidents such as Fukushima. One thing I think we can be reasonably sure about is that with a large price-insensitive buyer of a commodity like we are seeing with the Sprott Physical Uranium Trust, the recent logarithmic price action in uranium is what you get when a tight market gets squeezed or even cornered. Bloomberg news article.
