To understand today's jump in uranium stocks like Denison Mines
After being mined and milled, uranium concentrate exists in the chemical form U3O8, also known as yellowcake. Impurities are next stripped out at a refinery, which produces UO3. This intermediate product is then converted to usable fuel.
There are only four conversion facilities in the Western world. One, Cameco's
Honeywell
Well, it's deja vu all over again, as the Metropolis facility faces new challenges today. Both equipment failures and a labor dispute are weighing on production. Union workers have been locked out since June 28.
One of the uranium price benchmarking firms reported a 4.8% jump in the spot price on Friday, and traders are reacting to that move today. It's not clear to me that we're looking at a particularly severe disruption in the global supply chain, nor that uranium prices are poised to go through the roof. (Though it's possible that speculators could have a significant impact on the spot price in this very illiquid market.) File this in the "one to keep an eye on" category for now.