Investment funds are shifting the uranium market, with bid pressures from the Sprott Physical Uranium Trust reaching historic levels.
- The Sprott Uranium Trust reached $1 billion in assets this week, with uranium holdings of 24.274 million pounds U308. Bid pressures resulting from the activity have hit levels unseen before.
- Market participation has increased in the past years, creating a balance in the market. This is expected to continue and lead to a stable equilibrium and a healthier market moving forward.
- Demand in the spot market has also surged to record highs, with commercial inventory filling in the gap between primary and secondary supply, versus demand. Not a lot of material is expected to come out of such funds.
- Purchases shifted to the spot market as the main avenue for uranium transactions in 2020 and 2021, as miners left some 20 million pounds of U308 in the ground in response to the COVID-19 pandemic.
The decline in production was offset by increased inventory drawdown, but the pandemic exposed the spot market’s vulnerability.
Source: World Nuclear News