CCJ : BASE 0 DURATION / POSITION TRADECameco (NYSE:CCJ) released a strong print ahead of market open, and followed up with a strong call, as the market leader points towards a narrowing supply/demand gap and increased willingness for utilities to contract at higher prices:
CATALYSTS :
McArthur River - CEO Gitzel indicated that there's no change to the Company's strategy of pre-selling future production; there's a home for the additional supply from McArthur's restart, and they will not be growing production to build inventory or sell into an oversupplied spot market.
Contracting - the company added 40m lbs to the contract book in the first month of 2022, as the fundamental backdrop for demand improved; additionally, the pandemic and depletion in Kazakhstan has brought security of supply challenges for customers; "contracting begets contracting" and Cameco expects continued opportunities to lock in favorable, long-term contracts throughout 2022.
Sprott - The emergence of a "financial market" buyer in late 2021, namely Sprott (OTCPK:SRUUF) soaked up a lot of spot-market supply and pushed up spot prices; however, spot buying also removed customer complacency and pushed longer-term contract prices higher.
Kazakhstan - both trade policy concerns and instability in Kazakhstan have focused buyers on the origin of supply and helped Cameco take market share.
Having struggled with an oversupplied market since Fukushima, it appears the uranium market is finally coming around for low-cost, long-lived producers in secure jurisdictions, like Cameco. With favorable policy likely to come out of the European Taxonomy proposals, the sector (NYSEARCA:URA) appears well positioned for a strong 2022.
SOURCE:
CCJ after the call -- after a decade, the market looks to be turning, shares up ~15%, Nathan Allen, Seeking Alpha, Feb. 09, 2022
seekingalpha.com
Uranium: Potential Trade Of The Decade, Gain Exposure With SRUUF, URNM, Live Hard Investing, Seeking Alpha, Feb. 10, 2022
seekingalpha.com
