Profiting from the Commodity Supercycle in a Changing World

The world is changing. Not because it wants to, because it has to. 

The politicians haven’t suddenly become wise — heck most aren’t even competent — when it comes to the clean energy revolution, they’re simply reacting to supply/demand fundamentals forcing their hands.
China just revealed its intent to spend nearly half a trillion dollars to build 150 nuclear reactors over the next 15 years. As Bloomberg reported, that's more than the rest of the world has built in the past 15 years.
The chairman of the state-backed China General Nuclear Power Corp. stated the longer-term goal is 200 gigawatts by 2035, enough to power more than a dozen cities the size of Beijing.
I told you a few months ago that either the world starts pivoting to nuclear or the lights will literally go out. China gets it.

China also has the vision to fund its clean energy revolution by backing over 70% of the nuclear reactors with loans from state-backed banks.
The low-interest-rate loans — 1.4% — average cost per megawatt-hour comes in at $42. That’s less than half of what it costs in developed countries with higher rates.

Here at home, the Wyoming Retirement System, Cheyenne (a $10.5 billion fund), just committed $50 million to the Sprott Physical Uranium Trust. Nice to be ahead of the curve. 
Speaking of SPUT, the Sprott Physical Uranium Trust (TSX: U)(OTC: SRUUF) announced recently it was upsizing its at-the-market (ATM) facility from $1.3 billion to $3.5 billion.

That’s more ammunition to take pounds off the market while the utilities — as I told you they would — continue to sit on the sidelines processing what’s going on. 
They’ll get it. It’ll just be at higher prices. 

I expect the uranium spot price to continue its ascension higher — along with the better uranium names in the space. Pullbacks are opportunities. Use them to your advantage.
Back to the Wyoming Retirement System. A presentation made to the board outlined the premise saying, “Until this price level is reached and sustained, demand for uranium will continue to outstrip supply, which should cause prices to increase. The potential upside to reach market equilibrium is quite significant with decent odds of a price overshoot,” the presentation said. 
“Renewable energy, primarily wind and solar, are not stable sources of power generation and are causing disruptions to the energy market as countries transition their power grids.”
I couldn’t agree more.
It’s not just uranium.
Ford just announced its plans to increase its production capacity of electric vehicles to 600,000 units globally by 2023, according to CEO Jim Farley.

If successful, it would make the company the second-largest U.S.-based producer of EVs, behind Tesla. First-mover advantage matters. 

Tesla said that the installed annual capacity at its Fremont, California vehicle assembly plant stands at 600,000, and in Shanghai at more than 450,000 cars per year. 
The company is also building new factories here in Austin, Texas, and Berlin.

Not to be outdone, General Motors plans to sell 1 million electric vehicles globally by 2025.
Neither company planned on being this aggressive with its electric vehicle production but the demand for electric cars and trucks has been so robust that the companies have had to fast-track their EV production schedules.

President Biden just signed a $1 trillion infrastructure bill into law. A bill that even had the support of several Republicans.
The plan focuses on investments in roads, railways, bridges, and broadband internet.
Roads, bridges, and major projects will receive $110 billion in funding. Passenger and freight rail will see a $66 billion investment. $7.5 billion will go towards making electric vehicles more accessible and $7.5 billion will go towards zero- and low-emission buses and ferries.
Power infrastructure will receive a $73 billion boost as well. 
There are worse things to spend money on if you’re going to spend a trillion here and a trillion there anyway.
I highlight the bill because it’s another example of how non-transitory this window to profit from the commodity supercycle is.
Profit we will. In the coming weeks, Nick and I will be sharing our thoughts on this cycle and why it’s creating the perfect trading environment.

Let's get it,

Gerardo Del Real
Editor, Daily Profit Cycle