What Inning is Uranium In?

Common #uranium question: what inning is it?

It’s currently the ninth inning. The closer is trotting in from the bullpen and they’re playing his music.

MLB teams play 162 games in a season - and I think we’re nearing the end of one now, and it’s definitely not game #162.

— Jeff Geringer (@jeffgeringer92) March 9, 2023

The ninth inning is a high-leverage situation.

Nominally, all 27 outs across nine innings have the same importance, but there’s a special energy to the 9th. Everyone in the park is laser-focused on the action if the game is close. It’s spectacle.

— Jeff Geringer (@jeffgeringer92) March 9, 2023

For over a year, we’ve seen progressive impacts of the Russian invasion of Ukraine work their way through the nuclear fuel cycle as Western utilities attempt to disentangle their supply chains with Russia.

The process has not been easy, and the process is not yet complete.

— Jeff Geringer (@jeffgeringer92) March 9, 2023

So my nine-inning arc looks like this:

— Jeff Geringer (@jeffgeringer92) March 9, 2023

Warmups: Rosatom emerges weaker from the new Russian Suspension Agreement negotiations with a reduced US market quota and therefore a reduced ability to participate physically and financially in the projected uranium (and broader nuclear fuel) bull market.

— Jeff Geringer (@jeffgeringer92) March 9, 2023

Early innings: Russian invades Ukraine. We saw a speculative pop in the uranium price and increase in the conversion/enrichment indicators but it wasn’t clear how long the conflict would last. Industry commentators at the time were unsure about the invasion’s long-term effects.

— Jeff Geringer (@jeffgeringer92) March 9, 2023

Middle innings: Ukraine found success in reclaiming territory and the duration of the conflict became more indeterminate. Utilities sought Western conversion and enrichment coverage b/c they couldn’t rely on Russia, and those prices increased significantly…

— Jeff Geringer (@jeffgeringer92) March 9, 2023

…Uranium was slightly different because Russia itself is not a major uranium miner. Contracting volumes were way up and LT price saw an uptick, but not the same as in enrichment and conversion. Supply chains were strained but not broken.

— Jeff Geringer (@jeffgeringer92) March 9, 2023

Later innings: nat gas issues spurred reactor development in Central and Eastern Europe. Russia continued to deliver on existing contracts, but was isolated from the forward market with no return in sight. It was unclear how Rosatom finds a home for some of its future production.

— Jeff Geringer (@jeffgeringer92) March 9, 2023

Sanctions or other trade action against Russian uranium are still being discussed (they’d be very impactful), but to me the theme of *this* game is the utility self-sanctioning that has already locked in a significant reduction in Russian market share for many years to come.

— Jeff Geringer (@jeffgeringer92) March 9, 2023

So as I look ahead to the next game, I consider how the impact of higher enrichment tails assays (i.e. overfeeding), new geopolitical realities and sensitivities, and a (re)commitment to nuclear power by multiple nations will affect uranium price and term contracting terms.

— Jeff Geringer (@jeffgeringer92) March 9, 2023

We are entering the first inning of a new game in #uranium. There are many candidates for new & returning sources of supply for the rest of the decade. The reactors of the world have uncovered requirements & need to secure their future fuel supply. Exciting times ahead.

— Jeff Geringer (@jeffgeringer92) March 9, 2023