Uranium Set for Strong Q4 After Summer Doldrums

Justin Huhn: Uranium Set for Strong Q4 After Summer Doldrumsyoutu.be

The summer is typically a slow time for commodities, and uranium is no exception. But Justin Huhn, founder and publisher of Uranium Insider, sees the market picking up in the fourth quarter.

“The interest is there, the news flow is positive,” he told the Investing News Network. “I think we could see a really, really strong Q4 for uranium this year, and I’m very much looking forward to that.”

Touching on one recent positive news item, Huhn shared his thoughts on the announcement that Japan is not only looking to restart idled nuclear plants, but also wants to develop next-generation reactors.

He explained that Japan wants nuclear power to account for 20 to 22 percent of its grid by 2035, which would mean restarting an additional 20+ reactors. In the short term, it wants to restart at least seven more reactors by mid-2023. Most have been offline since an earthquake triggered 2011’s Fukushima nuclear accident.

“For the country that suffered that meltdown to be re-embracing nuclear, it’s really a strong signal,” Huhn said.

Aside from that, he spoke about the shift from underfeeding to overfeeding in the uranium sector.

Underfeeding happens when enrichment companies have excess capacity due to lower demand; during these times, they can use less feedstock (UF6) to get the same amount of enriched uranium by processing the material for longer. Overfeeding is the opposite — it requires more feedstock, but can produce enriched uranium faster.

In the previous underfeeding environment, enrichment companies were ending up with excess UF6 that they could sell back into the market. The amount was substantial at more than 20 million pounds a year.

“So we’re talking about a significant swing in demand from 20 million to 25 million pounds of excess supply, to actually seeing 10 million to 20 million pounds of new demand from overfeeding,” said Huhn. “That total swing — we’re looking at a 35 million, 40+ million pound swing. That’s happening right now — it’s starting right now.”

Watch the video above for more from Huhn on the uranium market.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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