Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Uranium, Cobalt and Silver - Recognizing Investor Opportunity In Difficulty

Commodities / Commodities Trading Jun 29, 2013 - 12:44 AM GMT

By: Richard_Mills

Commodities Right now I’m a big fan of uranium, cobalt and silver. Here’s why…

Uranium

In 2012 world consumption of uranium was 165 million pounds versus 152 million pounds of mined uranium production. Globally there are 434 nuclear reactors operable, 67 reactors are under construction, 159 are on order or planned and 318 are proposed.


For investors the uranium supply/demand picture is interesting for several reasons:

1. Nuclear power generation is being ramped up across the globe.

2. Japan is restarting its reactors.

3. The Megatons to Megawatts deal, the HEU agreement, is coming to an end.

4. The U.S. has no uranium security of supply

Global uranium stockpiles have been filling the gap between consumption and production for more than two decades. By far the largest contributor has been the Russian Highly Enriched Uranium (HEU) agreement, providing 24 million pounds of uranium to the market every year. However, secondary supplies are drying up and the HEU agreement is coming to an end in 2013.

Cameco (one of the world's largest publicly traded uranium companies) estimates world uranium demand will increase to about 240 million pounds by 2022.

The U.S. is in an especially dire situation in regards to the security of its uranium supply and the situation doesn’t look set to improve through exploration or new mine development anytime soon. Employment for uranium exploration in the U.S. was 161 person-years in 2012, a 23 percent decrease compared to 2011. The long lead time of uranium mine development - up to ten years - means that the industry is unable to respond quickly to sudden increases in demand or significant supply interruptions. With the recent lower uranium prices, delays and cancellations of new projects is becoming the norm and exacerbating the coming global and U.S. supply crisis.

Ten percent, or just 4.9 million pounds, of the 49 million pounds U3O8e uranium loaded into U.S. civilian nuclear power reactors during 2012 was from U.S. mined uranium, 90 percent was foreign supplied uranium.

According to the World Nuclear Association (WNA) there are plans for 13 new reactors in the U.S., three reactor units are under construction, and as many as six may come online in the next decade.

Expect uranium spot prices to start climbing to equalize with long term prices and then both to begin a rapid advance as the supply squeeze starts to be felt.

Cobalt

UK-based trading company Darton Commodities said, in its 2012-2013 cobalt market review, that:

  • The fundamental outlook for the cobalt market improved in 2012
  • A structural price recovery is likely in 2013 as there was a five percent drop in global cobalt output in 2012
  • During 2012, refined cobalt supply dropped an estimated 3,839 mt to 76,040 mt, 4.8 percent below 2011
  • Global cobalt consumption grew an estimated 6.8 percent in 2012, reaching 73,900 mt
  • Consumption from the battery sector saw robust growth on the back of demand for tablet and smart phone devices, with cobalt usage breaching 30,000 mt
  • Demand from the super-alloy sector continued to see strong growth from the aerospace and industrial gas turbine markets, with demand reaching 14,800 mt
  • Strong demand growth in 2012 saw significant destocking of cobalt materials in China over the year
  • Darton estimated cobalt demand in China increased 13.7 percent from 2011 to 28,900 mt in 2012

"Demand growth led to a gradual but significant destocking of both unrefined and refined cobalt materials in China. Consequently, the overall supply and demand imbalance which has undermined the cobalt market for the past couple of years appears to have been restored resulting in a fundamentally more balanced market outlook for 2013." Darton Commodities

The Democratic Republic of the Congo (DRC) supplies 55 percent of the world’s cobalt. With much of the world’s incremental supply over the coming years expected to be sourced from the DRC expectations might be too high…

Crisis in the Congo is giving ahead of the herd investors an exciting investment opportunity.

Between an outright ban on the export of raw minerals, project ownership grabs, power shortages and armed conflict the DRC’s resource sector is imploding. Most of the DRC’s cobalt goes straight to China who refines it and sells it to the world, a major amount – 20 percent - goes to the U.S. which imports 85 percent of its cobalt needs, expect both countries to be screaming for cobalt as a supply crunch gets underway because of the ongoing Congo drama.

The supply sides of both cobalt and uranium are shrinking while demand increases and security of whatever supply there is, is far from assured - perfect storms that bode well for investments in both cobalt and uranium.

Silver

Silver bullion sales are constantly breaking records, high premiums over spot are not fazing buyers. Sales of silver coins by the U.S. Mint (one of the world’s top producers of gold and silver coins) have set a record high in the first half of 2013. That’s the best start to a year…ever.

Here’s a question worth considering – when was the last time you heard of a bull market ending, in any commodity, let alone a money metal like silver, with a period of sustained, record physical demand two years after peak prices?

Michael Kosares, of usagold.com, has put to together this excellent chart and his short commentary follows.

“This monthly gold chart is drawn on the logarithmic scale in order to remove some of the melodrama to the latest correction. Linear charts emphasize nominal price movement while a log chart emphasizes the percentage movement. By reviewing gold’s latest correction on a percentage basis, we can put things into a little bit better perspective. The 2008 correction was 26%; the current correct thus far has been 30%. In short, we’ve been here before…” Michael J. Kosares

The high-to-low down moves in gold and silver we’ve recently witnessed are very close, percentage wise, to the down moves we saw in 2008, if the precious metals bull market corrective phase we have just suffered through has bottomed, silver will, much sooner than later, soar.

“In the middle of difficulty lies opportunity.” Albert Einstein

Investors need to ask themselves “is the precious metals bull market over?” This scribe doesn’t believe it is, and if you believe the bull is not dead here’s the opportunity in silver…

From January 2000 gold went from $300.00 per ounce to almost $1,900.00, while silver, in the same time period went from roughly $4.50 to almost $46.00. As you can see from the above charts the bulk of gains were captured from the end of 2008 to the peak prices, in both gold and silver, in the summer of 2011. Gold’s gain from roughly $750.00 to $1850.00 was impressive but even more impressive was silver’s gain – from just over nine bucks to $46.00.

Conclusion

“To recognize opportunity is the difference between success and failure.” Anon

It’s pretty obvious why, after reading the above pages, I’m a huge fan of, in no particular order, uranium, silver and cobalt.

Demand for uranium and cobalt isn’t going to disappear anytime soon, these critical, and yes strategic, green energy metals are just as necessary to the functioning of a modern economy as the water we drink to survive. Silver bullion demand is soaring because it is a monetary, industrial and miracle medical metal whose current investment potential returns from here look tremendous.

Demand for the three are going up, supply is not going to keep pace, currently the junior resource companies that search for and develop deposits of these minerals are severely undervalued and out of favor with investors.

How can this not be a good situation for investors? Shouldn’t all three sectors, and the quality, moneyed up, junior resource companies (who are still extremely active developing their projects and increasing shareholder value), be on all our radar screens? Are they on yours?

If not, maybe one should be.

By Richard (Rick) Mills

www.aheadoftheherd.com

rick@aheadoftheherd.com

If you're interested in learning more about the junior resource and bio-med sectors please come and visit us at www.aheadoftheherd.com
Site membership is free. No credit card or personal information is asked for.

Richard is host of Aheadoftheherd.com and invests in the junior resource sector.

His articles have been published on over 400 websites, including: Wall Street Journal, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell, Pinnacledigest, Uranium Miner, Beforeitsnews, SeekingAlpha, MontrealGazette, Casey Research, 24hgold, Vancouver Sun, CBSnews, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, Mining.com, Forbes, FNArena, Uraniumseek, Financial Sense, Goldseek, Dallasnews, Vantagewire, Resourceclips and the Association of Mining Analysts.

Copyright © 2013 Richard (Rick) Mills - All Rights Reserved

Legal Notice / Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

Richard (Rick) Mills Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules