Who is selling their Uranium to Sprott ?12 Sep 2021 22:22
This occurred to me over this weekend - where are Sprott getting their Uranium from ? So YCA have a long term contract with Kazatomprom to supply uranium, which is similar to how the power station operators get their as I understand it. Which is the primary market. But Sprott don't. The commentary I have been reading talking about Sprott buying Uranium on the secondary market - but who exactly is this ? Given the rising price, who on earth is selling their Uranium to Sprott instead of sitting on it ?
[ it occurs to me that YCA could sell to Sprott at the current price, and then re-buy from Kazatomprom using the previously negotiated contract price, which is lower, generating a profit. which would be an amusing way to play it. ]
A related point - One of the articles linked below talks about how the investment companies dont seem to have any plans to sell their Uranium, and thus the utilities may have to rethink the idea of buying on the secondary market. But if that ends up with a situation where they are getting all their supply, from the producers, then there is no secondary market (nobody else actually *needs* the stuff after all) and thus how does it still have value ? No point in sitting on loads of the stuff if there are no potential buyers after all.
I thought I understood the whole investment case here, but now I am a bit puzzled. Firstly as to where Sprott are getting the stuff from, and secondly how this doesnt end up with the utilities getting all their supply from the producers, and thus leading the investment companies which shedloads of the stuff but nobody to sell it to except for each other! If someone could explain it for a newbie like me then that would be good :-)
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