UxC Special Report
Market Viability of USEC, Inc.

Today, there is concern that USEC will not be able to maintain domestic capability to enrich uranium (a serious matter not just to utilities but also to defense programs potentially in need of tritium) due to rising costs and weak prices, a shrinking contract portfolio, and resulting inability to deploy a new cheaper technology. There is also concern that USEC will not be able to function effectively in implementing the HEU deal (a critical supply issue for utilities as well as an essential national security concern to government) due to the inability to sell sufficient volumes of enrichment services and the existence of a high overhead that would necessitate much lower than market prices to Russia, which may not be politically acceptable. Finally, there is concern that USEC's financial imperatives are driving aggressive sales of SWU, conversion, and uranium, undermining prices in all three markets and threatening the viability of the U.S. domestic nuclear fuel cycle industries.

USEC Report
To address these concerns, UxC has recently completed a report on USEC's market viability. The report first examines USEC's pre-privatization objectives and from this identifies the post-privatization success and failures. It then takes a look at USEC's role in the enrichment market, including its historical market share, its regional market prospects, and utility perceptions of USEC. Forecast price trends are provided to characterize the market in which USEC is operating.

The report then investigates the factors affecting USEC's commercial viability. It considers such areas as USEC's financial situation, its economics of production (including non-production expenditures), inventory sales, the HEU agreement, and potential technologies that USEC can pursue. It also examines potential USEC strategies and market/output interactions.

The final chapter of the report reviews the potential actions that can be taken in response to issues related to USEC's viability. These include actions by the government (subsidization or re-federalization of USEC and appointment of an alternative or additional executive agent in the HEU deal), as well as potential private sector developments. The report concludes by discussing the prospects for near-term action.

Supporting Documents
A bound set of exhibits is included with the main report. These exhibits contain extensive background information as well as supporting documents, such as letter correspondence, government agreements, draft re-federalization legislation and financial information.



This study was orginally made available for the price of US$7,500, or US$5,000 for customers that are already subscribers to UxC's Market Outlook Reports.

For more information, please contact Eric Webb at (770) 642-7745 or via e-mail at . An electronic, as well as printed copies of the table of contents, introduction and executive summary are available upon request.

We hope you are interested in this report, and if we can provide of any other services for your nuclear fuel consulting and market information needs, please do not hesitate to contact us.

For additional information please contact Eric Webb at
Phone: (770) 642-7745 Fax: (770) 643-2954 Internet:

Updated: 9/18/00