ON DECEMBER 3RD McIntyre Partnerships, a hedge fund in New York that normally buys equity and debt securities, told investors it was buying a commodity: uranium. This “slight anomaly” was justified by the metal’s impressive recovery, said its founder, Chris McIntyre. Uranium’s spot price has jumped by 41% since April, to near a two-year high (see chart), following an overdue reduction in supply.
Uranium fell out of favour after the Fukushima nuclear disaster in 2011, which led to plant closures in Japan and Germany and a slowdown in plant-building elsewhere. (Uranium, or plutonium, which is made from it, is an essential nuclear fuel.) Despite the recent surge its price, at $ 29 a pound ($ 64 per kilo), is still 60% below the 2011 peak, according to UxC, a consultancy. Production costs will be above that for perhaps three-quarters of this year’s output.
Uranium miners were slow to cut supply in response….