Global Market Commentary, Analysis and Investments
Uranium is still a “Buy”…maybe now more than ever.
The disaster in Japan slammed the uranium sector…and it still has not recovered. But this washout looks like a buying opportunity, as long as you’re not in a hurry to make a big gain.
I won’t go into the Japan-specific details, but for our purposes, it’s a safe bet that the Japan disaster means that we may not see a large-scale “nuclear renaissance” during the next generation.
[Read more...]An Interview with Patrick Cox by WYPR’s Midday with Dan Rodricks
Dan Rodricks, Host, Midday: I’m Dan Rodricks, and you’re listening to a special edition of Midday we call Power Ahead: The Energy Future. We continue our discussion about nuclear power with a specific look at something of international public concern since the tsunami hit Japan. Can even an advanced economy master nuclear power safely? Can nuclear power be safely harnessed?
[Read more...]A second reactor at the Fukushima Daiichi nuclear plant in Japan may have ruptured. Plans to douse the reactors with water via helicopter had to be abandoned. Radiation levels are apparently too high.
“The nuclear renaissance is dead,” concludes Chris Mayer in his essay “Japan’s ‘Three Mile Island’”, after several days of deliberation that began early on Saturday at JFK airport in New York, where we heard news of the first explosions.
[Read more...]Chris Mayer, editor of Mayer’s Special Situations, shared this bit of investment wisdom with his subscribers yesterday:
“Charlie Munger, the long-time Vice Chairman of Berkshire Hathaway, says there are three buckets where investment ideas go: ‘Yes,’ ‘No’ and ‘Too Hard.’ I think uranium is too hard.”
[Read more...]Japan’s nuclear disaster is tragic on many levels. My focus here, though, will be on what it means for uranium investments and the world’s energy markets.
The main worry is that the situation in Japan chills the industry in the same way Three Mile Island did in 1979. Will political pressures quash the nuclear renaissance? It’s too early to know for sure how this will play out, but we can make some guesses.
[Read more...]Nuclear will give you, by far, the most energy for your money right now.
The best way to view this issue is in terms of what physicists call ‘energy density.' That is, let's measure the amount of energy stored in a given volume or mass of a certain substance or material.
Below is a table that I put together expressing the energy density of an array of materials in terms of megajoules of energy per kilogram. A megajoule – MJ – is 1 million joules, or approximately the kinetic energy of a 1-ton vehicle moving at 160 km/h (100 mph). The point is to show that if something has a high energy density, then less physical material will release the same amount of energy:
[Read more...]Uranium prices appear to be bottoming, as China buys major supplies from Cameco (NYSE:CCJ). On June 24, China agreed to buy more than 10,000 tons of uranium oxide – yellowcake – over 10 years from Cameco.
According to Thomas Neff, a physicist and uranium industry analyst at the Massachusetts Institute of Technology, China is buying unprecedented amounts of uranium. Based on public information, China may purchase about 5,000 metric tonnes of yellowcake this year. That's more than twice as much as China consumes.
[Read more...]There is only one uranium blue chip, and that's Cameco Corp. (NYSE:CCJ), based in Saskatchewan, Canada. It is the second largest uranium miner in the world, after Kazatomprom. Cameco produced about 20 million pounds last year, or 16% of the world's supply. It aims to double production by 2018 from its existing assets – nearly a billion pounds of resource – excluding potential acquisitions.
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The Upside to a Natural Gas Downturn
Isaac Newton showed us that for every action there is an equal and opposite reaction. That is why every downside force in the energy sector creates upside opportunities elsewhere. The challenge is finding them. It takes an understanding of the entire global energy machine to figure out what areas are benefiting from the changing landscape.
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