Is Someone Cornering the Uranium Market?

Sprott Uranium

Last night, I was digging through the usual stack of articles that I read from 10 pm until midnight. I’d try to go to sleep earlier, but if I wake up at 6 a.m., I’d be two hours behind on research. There is so much information out there today that it can feel almost impossible to navigate. But I do pay attention to a list of usual suspects. One of them is Sprott Management, a company with ties between Canada and the United States. They are a top-notch commodity shop, driven by a group that is obsessed with the uranium trade. They operate something called the Sprott Physical Uranium Trust that trades in both U.S. and Canadian dollars. It’s not hard to figure out what this fund buys.

Sprott Management Buys Uranium

A week ago, the company poured a can of gasoline onto the uranium sector. Basically, it sold new shares and then turned around and used the money to purchase physical uranium from the open – or spot – market. They bought roughly 900,000 pounds of the stuff. To put that into context, that’s about how much a 1 GW-class reactor uses every two years. So, this isn’t exactly a small purchase. Sprott has long believed that uranium is undervalued. At a time that all of the focus is on electric vehicle commodities like lithium and solar panel minerals and metals, people forget the importance of nuclear energy.

I don’t know a single person with influence in the global energy business who thinks that EVs and hydrogen are going to solve the carbon emissions crisis (as it is described to me by said experts) alone. Governments are finally coming around that the only hope to meet Paris Accord level emissions is to incorporate nuclear power.

And so, there goes Sprott buying up all of the fuel. It looks as though uranium prices are going to hit their highest levels in five years. How high will they go? Well, that’s going to depend on how quickly the institutional and retail crowd piles on. We’ll talk about this trend, and the booming alternative energy space next week.

Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.
Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.

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