Uranium prices continue to get compressed towards $0, as a few week hiatus of the blood was met this morning with the first real print in weeks – and it was an ugly one.
My impression is that the uranium market has been dead for months now, while the major players of nuclear utilities and uranium cake producers play a game of chicken with one another. And unfortunately, because nuclear reactors can run so long without refueling, this game can go for a long, long time.
I’ll take a moment to remind you of advice I’ve given before; every now and again it needs to be repeated.
Stay out of the small uranium miners.
Just because I like CCJ does NOT mean I like CCJ’s half-starved siblings. CCJ has a war chest and controls 20%+ of the market. CCJ’s competition sometimes isn’t even producing uranium. If you’re not playing the waiting game with a billion dollar budget, at minimum, I hate to tell you this pal…but you’re prey.
I’m in CCJ from the onset because I know how this ends; countries are not going to diversify away from nuclear power. That would be stupid. However, that doesn’t mean Japan wouldn’t like very much to see its public utilities able to load up on fuel contracts at dirt cheap prices. Or that every other reactor globally wouldn’t like to devour Japan’s reactor fuel should they be forced to market.
In the meanwhile, without a price recovery, CCJ’s stock is going to be horrible. $13 is not out of the question. But they’ll survive, and if you think they have pricing leverage at 20% market share, well…it’s only going to get more ridiculous.
I will buy my next batch of $CCJ if it hits $15.