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From Hiroshima to Fukushima: The World's Most Hated Commodity Is Set for an Explosion

• https://internationalman.com, by Nick Giambruno

Simply put, nuclear power delivers immense value to its users, there's no substitute for uranium, and supplies are precarious while demand rises. Further, nuclear power produces zero carbon emissions, dodging a potential ESG headwind.

Here's the bottom line with uranium. The situation has only two possible outcomes.

Uranium prices don't go up. Miners have no incentive to produce. Nuclear power plants run out of uranium, and the lights go out for billions of people.
Uranium prices go up and incentivize enough production to meet the demand.
Which one is more likely?

The truth is that not only could the uranium price rise enough to incentivize production, but it could far overshoot—just as it has done in previous cycles—since it will take years for production to catch up with increased demand.

The key is to get positioned in the best uranium stocks before that happens.

The Uranium Market
Many people don't like nuclear power, which is often seen as politically incorrect.

Some hear "uranium" and think "cancer." Many get emotional because of its association with Hiroshima, Nagasaki, Chernobyl, Three Mile Island, and Fukushima. As a result, uranium is the world's most hated commodity.

This is why I'm excited. Crises and extreme sentiment don't scare me. They attract my interest. Being a successful speculator involves turning mass psychological aberrations in your favor.

Combine this irrational sentiment with the compelling fundamentals of the uranium market, and you have the makings of an excellent contrarian speculation.

Demand

Nuclear power plants account for most uranium demand, which is inseparably linked to the uranium price and market cycles.

A nuclear power plant produces energy by splitting uranium atoms. The energy released boils water, creating steam that drives turbine generators. These plants use fuel made from uranium ore. First, miners extract the ore from the ground. Then, it's enriched and made into fuel pellets.

According to the American Nuclear Association, one nuclear fuel pellet (about the size of a small gummy bear) has as much energy density as 3 barrels of oil, 2,000 pounds of coal, or 17,000 cubic feet of natural gas.


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