George Glasier: How Low Will Uranium Go?
Many commodities have gone up 20-30 percent this year while uranium continues to go down- making it almost impossible for companies to make money. The main problem right now is that there is more than enough supply to cover the little demand in the spot market.
Obviously many companies want more cash and less inventory on their balance sheets by years end, so they are motivated to sell at almost any price. Through the end of the year we may not see an upward movement- but could see a small drop as aggressive sellers try and unload some of their inventory. The catalyst for prices to go up this time will be utility buying, just like the bull market in 2001-2002 when it went from $6 to $138.
Some utilities could go to the stock market, pick up low cost pounds, and hold them at a low carrying cost- but what they may be doing is trying to judge what the longer term prices will be, and the contracts they could get VS buying out. If the contracts aren’t very attractive to them, they could very well go to the stock market to sell in 2018-2019. This would create additional demand and drive up the price.
George Glasier is the CEO and President of Western Uranium, which at 2 years old is already the 2nd biggest resource holder in the USA. Energy Fuels is the 1st, which George was the founder and CFO of- including in 2006 when Energy Fuels stock went up 65 fold! As Western Uranium sees a bit of an increase in price, they will go into production. With their ablation process, they should be one of the lowest cost producers in the world.