Podcast #22: Mike Alkin - Uranium

L2 Capital

In today's episode, Marcelo López spoke with Mike Alkin, co-founder of Sachem Cove Partners and manager of an American uranium-focused hedge fund. Mike has been following this market for over 4 years as an investor and was a speaker at the International Uranium Fuel Seminar hosted by the Nuclear Energy Institute (NEI) in Nashville, USA, in the last week of October.

Alkin, who also attended the World Nuclear Association (WNA) Symposium in London, commented on the biennial report released by the organizers and on the differences between the two events, highlighting the significant attendance of uranium buyers at the NEI-hosted seminar in the USA.

Mike spoke about his presentation at the conference, which focused on the uranium price discovery, i.e., the process of pricing the U3O8 market from a macro and historical perspective. He drew attention to the fact that this industry is scarcely covered by sell-side analysts, and that the consensus adopted by the uranium buyers lacks important and easily refuted fallacious aspects.

In addition to highlighting factors that are hindering the industry, such as the Section 232 petition and the Trump administration's creation of the Nuclear Fuel Working Group, Mike talked about the functioning of the spot market, its peculiarities and the movements it has observed in terms of player participation and trading volumes in contrast to other times and circumstances.

Finally, Alkin discussed a major issue for investors in the industry, which is the inactivity of buyers in the face of low and unsustainable prices in an attempt to anticipate a price hike and secure low-priced material. Mike explains how the activities of buyers' professionals are structured, the incentives they have and the way they have acted historically.