David Hay — Haymaker Daily: Uranium — Poised To Glow Once Again
While oil and LNG shortages grab the headlines, Haymaker argues the uranium market suffers "inexplicable… complacency." A chart from Kiwi friend Trader Ferg shows nuclear utilities have contracted for less uranium than they consume for over a decade — a shortfall that began after Fukushima and has now fully depleted excess inventories, just as 70+ new reactors are planned and 16+ mothballed plants restart. The leading uranium ETF SRUUF has pulled back to $18–20 after twice hitting $25, even as spot uranium trades ~$85 (term prices higher) — so prices are "poised to surge again."
One-line take: A short, contrarian uranium Daily. With the world fixated on worsening oil and LNG shortages, Haymaker flags "inexplicable and… inexcusable complacency" in the uranium market. Leaning on a chart from "close Kiwi friend Trader Ferg," it shows utilities contracted for more uranium than they consumed in 2005–2012 (reacting to earlier under-ordering) — then, after Japan's 2011 Fukushima disaster triggered a "knee-jerk… significant overreaction" (65 plants shut, others' lives shortened), "almost immediately began contracting for much less than they were using," a shortfall that has "continued for over a decade." The upshot: "Excess inventories are now fully depleted." Aggravating the next "buying panic," there are 70+ new nuclear plants under construction or planned globally (ominously, "nearly all… Chinese or Russian designs") plus 16+ restarted mothballed plants (more to come, especially Japan). The one investable name: SRUUF (the leading uranium ETF/physical trust), which has pulled back to ~$18–20 after twice hitting $25, even though actual uranium is ~$85 in the spot market with long-term contract prices "well above that level." Haymaker "believes prices are poised to surge again… once the utility industry wakes up to the implications of severely deficient supplies at a time of erupting demand." (SRUUF is already a 2-lot Haymaker Buy-list holding.)
1. Stocks & names mentioned
| Ticker | Name | Research | View | What he said | At |
|---|
| SRUUF | Sprott Physical Uranium Trust | QT · SA · STK | Positive | Named as "the leading uranium ETF," a way to own physical uranium exposure. After "several valuation spikes" in recent years, the price has "been a bit heavy" — SRUUF has pulled back after twice hitting $25 and is now bouncing around the $18 to $20 vicinity. Yet the metal itself sits at ~$85 spot with long-term contract prices "well above that level." Against a decade-long supply deficit (utilities contracting below consumption since Fukushima), fully depleted excess inventories, 70+ new reactors planned and 16+ restarts, Haymaker "believes prices are poised to surge again… once the utility industry wakes up to the implications of severely deficient supplies at a time of erupting demand." A held Buy-list position (2 lots). | read ↗ |
"View" is Haymaker's stance in this post. Referenced only (not a ticker): Trader Ferg, the "close Kiwi friend" whose uranium contracting-vs-consumption chart anchors the piece (a person — excluded from the education list). Research: QT Qualtrim · SA Seeking Alpha · STK Stock Analysis.
2. Talking points
The overlooked shortage — oil & LNG get the anxiety, uranium gets complacency
- "The worsening shortages of oil and liquefied natural gas (LNG) are once again capturing the world's attention and for good reason" — and there "should probably be much more anxiety" about how the world adapts to that "unprecedented supply disruption."
- Yet there is "inexplicable and, we would argue, inexcusable complacency" about the parallel setup in the uranium market.
The chart — a decade of contracting below consumption
- The framing rests on a chart "relayed to us and his other followers, by our close Kiwi friend Trader Ferg," which "gets right to the heart of the matter."
- In 2005 to 2012, "nuclear utilities were contracting for much more uranium than they were consuming" — a reaction to "under-ordering in the first four years of this century's first decade (and possibly earlier)."
Fukushima's decade-long shadow
- In 2011 the industry "was slammed by its worst accident ever, Japan's Fukushima disaster." The "knee-jerk reaction — which was, in hindsight, a significant overreaction — was to shut down 65 nuclear power plants," with many others' "operating lives shortened."
- As a result utilities "almost immediately began contracting for much less than they were using," and "this shortfall has continued for over a decade."
Inventories gone, demand pipeline building
- The bottom line on supply: "Excess inventories are now fully depleted."
- Aggravating "the next upcoming buying panic," there are now "over 70 new nuclear plants under construction or in the planning stages around the world" — "ominously for the West, nearly all of these are Chinese or Russian designs" — plus "at least 16 mothballed plants that have been restarted with more to come, particularly in Japan."
SRUUF — price is "heavy" while the metal is ~$85
- "The leading uranium ETF, SRUUF, has had several valuation spikes" in recent years; lately "the price action of the heaviest natural element, 92 on the periodic table, has itself been a bit heavy." SRUUF "has pulled back after twice hitting $25 and is now bouncing around the $18 to $20 vicinity."
- Meanwhile "actual uranium in the spot market is roughly $85, with long-term contract prices well above that level." Haymaker "believes prices are poised to surge again, particularly once the utility industry wakes up to the implications of severely deficient supplies at a time of erupting demand."
3. In plain English
A jargon-free note on why the pick matters. (Companion to the table above; renders on the name's consolidated page.)
SRUUF — Sprott Physical Uranium Trust Positive
SRUUF is a fund that actually owns physical uranium in storage, so its price roughly tracks the price of uranium itself — the fuel used in nuclear power plants. Owning it is a simple way to bet that uranium gets more expensive, without having to pick individual mining companies. Hay's argument is a classic supply-and-demand squeeze. For more than a decade, the power companies that run nuclear plants have been signing contracts to buy less uranium each year than they actually burn, running down stockpiles instead. That started after Japan's 2011 Fukushima accident, when the world panicked and shut dozens of reactors. Now those spare stockpiles are gone — and at the same time the world is building 70+ new reactors and switching old ones back on, so demand is set to jump.
The mismatch Hay highlights is that the fund's price has drifted down to about $18–20 (after twice topping out near $25), even though uranium itself sells for around $85 in the spot market — and the long-term contracts utilities sign to lock in future supply are priced even higher. In his view, once utilities realize how tight supply really is, there will be a scramble to buy (a "buying panic"), and prices — and SRUUF along with them — should spike. It's already a position he holds (two lots on the Haymaker Buy list), and this note reaffirms the bullish case.
Summary derived from the paid Haymaker newsletter (text in transcript.txt) for personal study. Not investment advice. © Haymaker / David Hay for source material.