Energy metals are garnering much investor attention and one analyst familiar to the space remains optimistic. Commenting on uranium prices, which have yet to move higher, Chris Berry of House Mountain Partners said he still sees a case for the metal. ‘In the wake of recent climate agreements, countries loosely agree to decarbonize their energy source and uranium is going to have to play a significant role in that mix,’ he told Kitco News. ‘In the next 18-24 months, you can see uranium prices 30% higher from where they are today.’ Berry is also optimistic on lithium, although he advises investors to remain cautious over the shorter term. ‘The price has absolutely gone parabolic and from my experience in energy metals, any time you see prices go parabolic, it usually ends in tears,’ he says. ‘So you want to be careful…it’s a good long-term story but it’s been on a huge run over the few months.’ Berry also shared his thoughts on gold prices, which he sees moving to $1,300 an ounce.
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2 Comments
It is very unlikely that the U3O8 price will go to $18/lb again. Although Uranium has been selling for below the cost of production for a few years now, there is a convergence of signs that seem to indicate that Uranium has hit a bottom and an up-cycle can be expected over the next several years.
Kazakhstan’s cutting their output this year by 10% (which is 3% of the global total output) indicates prices have to rise because their chairman said that at this point it is more valuable to shareholders if they leave the uranium in the ground at this point.
The supply and demand fundamentals for uranium are very strong. Above-ground supplies are being depleted yet demand is increasing. There will soon not be enough primary mined supply to meet demand and it takes 10 years to permit and develop a mine so the U3O8 price has to rise because the commensurate supply will be so slow-in-coming.
Also, investor sentiment has been VERY bullish since November 2016. Uranium mining shares broke out on high-volume trading in late 2016 and into Jan 2017. There is an increase in Private Placements which are being oversubscribed. Uranium Participation Corp began trading at a significant premium in late 2016. These are all very positive signs for uranium. Uranium mining shares over the next several years should see significant gains.
Gold is king