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#UraniumSqueeze? Uranium Hits Highest Price Since 2014 After Concerted Fund Buying

The price of uranium has surged to its highest level since 2014 owing to buying pressure exerted by Sprott’s Physical Uranium Trust…

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This article was originally published by Miningmx

THE price of uranium has surged to its highest level since 2014 owing to buying pressure exerted by Sprott Inc, an investment firm that is trying to corner the physical market, said Bloomberg News.

Sprott, which launched its Physical Uranium Trust earlier this year, has built up 24 million pounds of uranium and had bought more than 500,000 pounds in a single day on occasion, the newswire said.

For comparison, total spot volume for 2020 was 92.2 million pounds, said Bloomberg News citing uranium investor Yellow Cake Plc, with utilities getting about 85% of their purchases through long-term contracts.

The buying is in addition to already bullish fundamentals.

Uranium prices must rise further to spur the restart of production to meet uncovered utility demand after 2023, according to analysts at Raymond James Financial. Earlier this year, NAC Kazatomprom JSC, the world’s top miner of uranium, said it would keep its output at reduced levels through 2023.

Sibanye-Stillwater

South Africa’s largest precious metals producer, Sibanye-Stillwater said on August 26 that it could separately list its uranium assets depending on studies the precious metals company was currently assessing.

The company said it was considering converting its ageing Beatrix West mine to uranium production as well as restarting uranium output from its Cooke tailings deposits west of Johannesburg. “We could see an announcement over the next quarter,” said Neal Froneman, CEO of Sibanye-Stillwater, regarding the structure of its push into uranium.

Asked to clarify Froneman’s statement regarding externalising the uranium, Sibanye-Stillwater spokesman James Wellsted said: “It may be, yes. It depends on what makes the most sense from a value perspective”.

The post Uranium price jumps to highest level since 2014 after concerted fund buying appeared first on Miningmx.

Economics

How Evergrande the parent hurt Evergrande New Energy

One thing that has recently caught my eye has been the unravelling of China Evergrande Group – a conglomerate with over 100,000 employees spanning primarily…

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One thing that has recently caught my eye has been the unravelling of China Evergrande Group – a conglomerate with over 100,000 employees spanning primarily real estate development but also new energy, property services and health amongst other industries.

Keen market observers would be aware of the Chinese government’s recent crackdown on various industries. Most headlines have been focused around the tech giants and the for-profit education sector, but has also involved online gaming companies (gaming restrictions), the steel industry (push for decarbonisation) and most recently Macau casinos. It has also maintained its tightening bias toward the property sector, which has further dampened the prospects for rebar steel, and by extension iron ore.

Property cycles are nothing new in China, with development and prices waxing and waning based on policy and availability of credit and partially responsible for cyclical price movements in iron ore. The most recent slowdown however seems to have hit the highly indebted Evergrande extremely hard, as unravelling confidence in its ability to repay its lenders (split between onshore and offshore) has sparked a sell-off in both its bonds (now trading at 30 cents on the dollar) while the company’s equity value, which peaked at a market capitalisation of over US$50 billionn and was as high as US$47 billion in June last year is now just US$4.4 billion.

One of the more interesting subplots has been the fate of its New Energy Vehicle group, a listed subsidiary in which the China Evergrande parent owns 65 per cent. Early in the Evergrande Saga, the Group proposed selling a stake in its new energy vehicles (NEV) subsidiary as one way to reduce its debt load. In January 2021, the group sold a ~11 per cent stake in the subsidiary to six investors, valuing the business at ~US$34 billion. Amazingly, this transaction – along with the hype surrounding the potential EV market in China and the company showcasing 6 new cars – triggered a furious rally which saw the share price rise 140 per cent in under 3 weeks, while its market cap peaked at US$85 billion despite not selling a single car (shades of Nikola in the US, albeit the NEV subsidiary also holds Evergrande’s legacy assets in the healthcare space and was formerly known as Evergrande Health Industry Group).

China Evergrande New Energy Market capitalisation

Screen Shot 2021-09-17 at 2.48.49 pm

Source: Bloomberg

As concerns around its parent deepened, “investors” became concerned around the potential fate of its subsidiary with the Parent’s 6.35 billion NEV shares seen as a potential source of liquidity. This has seen a stunning collapse in Evergrande NEV’s market cap by ~US$80 billion since mid-April and has also caused liquidity issues in the NEV arm which just reported losses of more than US$742 million.

A good reminder to pay heed of any potential contagion and ripple effects, albeit most are hidden and only discovered after the fact (as well as the obvious lessons on the highs and lows of “investing” in pockets of extreme exuberance).

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Energy & Critical Metals

Why The Solar Industry Is the Inevitable Future of Earth’s Energy

There was a point in time when the solar industry was considered dead money.

Source: Diyana Dimitrova / Shutterstock.com

It was too expensive, too…

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There was a point in time when the solar industry was considered dead money.

Source: Diyana Dimitrova / Shutterstock.com

It was too expensive, too inefficient, and too inconsistent to be a viable alternative energy source for really anything, let alone your home or office.

But those days are long gone.

Today, solar represents the inevitable future of our planet’s energy needs because it’s cheap, efficient, consistent, and most importantly, clean.

Solar energy costs have dropped more than 70% over the past 10 years, and are now cheaper than fossil fuels in most parts of the United States. Indeed, the International Energy Agency said in 2020 that solar is the now the cheapest energy in history. Let that sink in for a moment.

Better yet, the drivers of these cost declines — economies of scale and technological improvements powered by Moore’s Law and Wright’s Law — are durable, and therefore, solar is only going to get even cheaper. Indeed, these forces are so powerful in the solar industry that they have their own law — Swanson’s Law — which states that the price of solar modules decreases by about 20% for every doubling in global solar capacity.

For what it’s worth, the U.S. Department of Energy believes solar costs can and will fall by another 60% into 2030.

So, solar is the cheapest way to power things today.

Meanwhile, solar panels have become very efficient at converting light from the sun into usable energy. Back in 1992, researchers at the University of South Florida fabricated a thin-film solar cell with 15.9% efficiency — and that was considered a breakthrough at the time.

These days, though, your average silicon solar cells sport efficiency rates north of 20%. That’s standard. And manufacturers have created prototypes that are getting 30% efficiency, while some research efforts have even managed to achieve near 50% efficiency in certain lab tests.

In other words, the theoretical best solar cells of the 1990s are substantially worse than your run-of-the-mill solar panels today, and there is a pathway here for solar efficiency to more than double over the next few years.

So, solar is also the most efficient way to power things today.

At the same time, these solar systems have become dramatically more consistent. One of the biggest hurdles for solar in the early 2000s was its intermittency — the sun doesn’t shine every day, so what do you do when its cloudy?

Well, that’s why the clean energy industry has developed energy storage solutions, which are basically just big batteries that homeowners and office building managers can install on-site and link to their solar panels to store excess solar power on super sunny days, and deploy that power on cloudy days.

By 2025, more than a quarter of all solar energy systems will be paired with a storage solution.

So, solar is now also the most consistent way to power things.

Cheapest. Most efficient. Most consistent. That’s a powerful combination. No wonder solar has accounted for 58% of all new energy capacity additions so far in 2021. Back in 2010, that number stood at just 4%, so we’ve come a long way in 10 years.

Source: SEIA

But don’t be fooled — we still have a long way to go.

Solar energy only accounts for about 4% of total energy generation capacity in the U.S. today. President Joe Biden wants to increase that number to over 40% by the 2030s — a plan that would include installing 30 gigawatts (GW) of new solar capacity every year into 2025, and 60 GW of capacity every year from 2025 to 2030.

For perspective, the U.S. installed just under 20 GW of new solar capacity in 2020, and that was a record-breaking year.

Is that aggressive plan really achievable?

Absolutely. Solar costs are plummeting. Solar efficiency rates are soaring. And the efficacy of energy storage solutions is growing.

In other words, the three drivers of solar going from 4% of new energy additions in 2010, to 58% of new additions in 2021, are only going to get stronger and more vigorous over the next 10 years — to a point where, by 2030, I wouldn’t be surprised to see solar accounting for 90%+ of all new energy capacity additions.

Needless to say, you need to be invested in solar stocks today.

But there are so many options out there. The Invesco Solar ETF (TAN), for example, has 55 holdings.

Not all 55 of those stocks will be enormous winners in the solar revolution — only a handful of them will turn into 100%-plus winners.

To help you identify that handful of solar stock winners, there’s the Daily 10X Stock Report — my ultra-exclusive investment advisory where I share with you one potential 10X stock pick every single day the market is open.

Of course, as part of the 10X upside potential mandate, I’m only unveiling the best of the best hypergrowth stocks to you — and that includes the best of the best solar stocks.

So, if you’re looking to invest only in the best solar stocks for 10X gains, The Daily 10X Stock Report may be just the product for you.

Click here to learn more.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

The post Why The Solar Industry Is the Inevitable Future of Earth’s Energy appeared first on InvestorPlace.

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Energy & Critical Metals

Arrival EV Stock: Getting Closer to Revenue

There have been some interesting companies that have listed in 2021 through a SPAC business combination. Further, there has been no dearth of companies…

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There have been some interesting companies that have listed in 2021 through a SPAC business combination. Further, there has been no dearth of companies that have listed in the electric vehicle industry.

Arrival (ARVL) seems like an attractive company in the commercial electric vehicle industry. After listing at $22.8 in March 2021, ARVL stock has been in a downtrend. The stock bottomed out at $10.40 last month and currently trades at $13.03. (See ARVL stock charts on TipRanks)

Considering the addressable market and its business developments, ARVL stock seems positioned for further upside. I am bullish on the stock as the commercial electric vehicle market growth gains traction.

As an overview, Arrival has a diversified vehicle portfolio with an electric bus, electric van and large electric van in the pipeline. By the company’s own estimates, the total addressable market for vans is $280 billion. Further, electric buses have a potential addressable market of $154 billion.

Clearly, there is a big opportunity and Arrival seems positioned to benefit.

Strong Growth in the Order Pipeline

It’s worth noting that Arrival expects electric bus production to commence in Q4 2021. Its electric van and large electric van are slated for launch in Q3 2022. Therefore, there is still time before Arrival generates meaningful revenue.

However, the company’s order intake has been robust. This is an early indication of the market potential. At the time of the SPAC business combination, Arrival reported orders worth $1.2 billion from United Parcel Service (UPS). The order is for 10,000 vans with the option for another 10,000.

Last month, Arrival reported Q2 2021 results. The company’s non-binding orders and LOI has swelled to 59,000 vehicles.

In another important development, Arrival and Uber Technologies (UBER) have collaborated on an electric car for the ride-hailing industry. The first Arrival car is expected to enter production in Q3 2023. The company is also in talks with other ride-hailing companies. This will open up another big market for Arrival.

The Microfactory Approach

In terms of manufacturing, Tesla (TSLA) has a Gigafactory approach. Arrival is entering the industry with a potentially game-changing Microfactory approach.

As the name suggests, the idea is to have smaller manufacturing units with a low capital requirement. Arrival estimates that the cost of setting up one Microfactory is $44 million. Currently, the company has a cash buffer of over $450 million. This can be utilized to set up ten microfactories.

The key advantage is that Arrival can easily create global presence through this approach. Further, with automation, the company’s Microfactory has a low break-even and lower number of employees per vehicle manufactured.

The approach can also be used for tailor-made solutions for big orders. Arrival is already setting up microfactories in U.S. and U.K. Based on the order backlog, these factors can be set up within six months in multiple locations.

Wall Street’s Take

According to TipRanks’ analyst rating consensus, ARVL stock comes in as a Moderate Buy, with one Buy assigned in the past three months.

The average ARVL price target is $20.00 per share, implying 53.49% upside potential from current levels.

Concluding Views

Another interesting fact about Arrival is the company’s extensive focus on innovation. The company has a team of more than 500 software engineers, and a strong portfolio of intellectual property. Last quarter, the company also partnered with Ambarella to deliver advanced driver assistance systems.

Overall, Arrival still has not generated revenue. However, the company has built a strong order backlog that provides growth visibility once the microfactories commence production.

It’s also worth noting that United Parcel Services, Uber and Leaseplan are big entities with global presence. Based on the initial delivery of vans, the orders might be scaled-up significantly.

These factors make ARVL stock attractive after a meaningful correction.

Disclosure: At the time of publication, Faisal Humayun did not have a position in any of the securities mentioned in this article.

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The post Arrival EV Stock: Getting Closer to Revenue appeared first on TipRanks Financial Blog.

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