Haywood Advises 'Underweight' Position in Base Metals Stocks, Bullish Long Term
Source: Mineweb (1/8/09)
"The underlying supply demand fundamentals for uranium remain strong."
The analysts noted, "The underlying supply demand fundamentals for uranium remain strong, producers continue to downgrade production forecasts (e.g., Cameco), and new production continues to be delayed owing to technical, geopolitical, and financing issues. Demand growth remains steady, particularly where funded/supplemented by sovereign sources."
Nevertheless, Haywood advised that the market-wide liquidity crisis has led to a sell-off of uranium inventory from funds and a pronounced decrease in the spot price. Haywood's analysis asserts that a "significant discord" between the spot and LT prices remains. "A dichotomy persists where company valuations in the capital markets track closely with the spot price rather than the LT price."