, 16 tweets, 9 min read Read on Twitter
"Underfeeding"? 🍼 What the heck is that?
And as a #uranium #investor, why should I care? 🤔

Follow this thread to find out what underfeeding is on #uranium supply side vs #nuclear energy demand, using "coffee beans" in place of #U3O8 Yellowcake. I hope I get this right. 🤞🏼😉
2/ Let's use "freeze-dried instant coffee" in place of "enriched #nuclear fuel" (EUP), where utilities are "coffee buyers", #uranium miners are growers, converters are roasters & grinders, & enrichers are factories where ground coffee is turned into packaged instant coffee.☕️
3/ Coffee grower (#U3O8 miner) harvests, dries and bags coffee beans (Yellowcake) to be stored in warehouse until a coffee buyer either buys a few bags "on the Spot" or negotiates a long term contract for so many bags per year. Coffee buyer sends bags to be roasted & ground.🛍️
4/ A "converter" roasts & grinds coffee beans (#U3O8) into enrichment factory feed (#UF6) which the coffee buyer sends to the enricher to process into packaged "freeze-dried instant coffee" (#nuclear fuel) that will be turned into coffee pods for their fleet of coffee shops.☕️⚛️
5/ Now comes the tricky bit that leads to "underfeeding". The enrichment factory charges by the hour (a #SWU) for producing instant coffee (#EUP) at desired strength. The longer you brew coffee, the stronger it gets.🏋🏼‍♂️ Use less coffee if you brew for longer hours (more SWUs).💡
6/ The coffee buyer negotiates with enricher for how much instant coffee to produce and how many hours (SWUs) that will cost to achieve the desired strength, and how much ground coffee (#UF6) will be needed. Contracts signed and coffee buyer ships feed (UF6) from converter.🤝
7/ The thing about the factory is that it can't be shut down.🏭 Must keep running constantly. With few customers (low #nuclear demand) it isn't busy so owner comes up with a plan.. instead of using ALL coffee provided by client, they'll use less (underfeed) 🍼 & brew it longer.⏳
8/ They can achieve contracted strength for final product by using less coffee to do that. Then, to recover cost of extra hours (SWU's) of brewing they sell the unused coffee feed "on the Spot" to other coffee buyers 💰 competing with growers by producing "secondary supply"! ↗️
9/ Just to make it even more complicated, the weak leftovers (tails) produced when making instant coffee can be also be stored & recycled back into factory process, further reducing amount of coffee needed for enrichment, reducing #uranium demand from growers even more! ⏬ Yikes!
10/ With me so far? 🆘 What happens now when coffee buyers open more coffee shops (#nuclear reactors) and demand for coffee beans (#uranium) is rising, and competitors expand their operations as well on rising coffee demand around the world? 🌊🌍⚛️↗️...
11/ There's now a lineup at factory of buyers wanting enrichment. Factory can now charge more per hour (higher #SWU) & each batch can be enriched faster by using ALL feed #UF6 provided by client, brewed for shorter time to achieve desired strength. No more unused feed to sell! 😲
12/ If enricher signed lots of contracts but still can't keep up with rising demand, they can further reduce brewing time by feeding more coffee than client provided (overfeeding), buying additional feed themselves "on the Spot" flipping from seller to buyer of Spot coffee. 📈
13/ Secondary supply has switched to Secondary demand!↗️ Coffee growers are jacking up Spot & contract prices as oversupply has rapidly turned into major supply deficit, with coffee buyers and enrichers needing coffee feed for enrichment factories. Coffee prices skyrocket! 📈🎇
14/ But Wait! Coffee growers were losing money from low prices so they cut production & got rid of 20% of their trees. It will take years to grow production, creating a major shortage for many years as demand keeps rising.. a #BullMarket is born.. #Uranium prices to the moon!🚀🌜
15/ In today's #uranium market, miners are now buyers 🛒 alongside investment funds, absorbing Secondary Supply.📈 Miners & enrichers both refusing to sign new replacement contracts with #nuclear buyers at current #U3O8 & #SWU prices.⚠️ Will accelerate onset of #BullMarket 🏎️🏁🐂
Thanks for the very positive feedback on this "underfeeding" thread. 📣👂🏼👍🏼 Goal was to help folks understand this complex & critical issue more clearly. 🌅 Next time you ask a #uranium Bear 🐻 for their opinion on underfeeding & get usual blank stare 👀.. buy them a coffee! ☕️😉
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