Washington (Platts)--17Nov2009/1037 pm EST/337 GMT

The drop in the spot price of uranium that followed US Energy Secretary Steven Chu's determination last week that transferring DOE uranium over the next 15 months to commercial firms would not have "a material adverse impact" on nuclear fuel companies in the US was tempered somewhat by news that a new fund is seeking to raise up to C$150 million (US$143 million) to buy uranium products, including enriched uranium.

TradeTech lowered its spot price on Friday to $43.50/lb U3O8, down $2.50 from its November 7 price and late Monday Ux Consulting dropped its price to $44/lb, down $1.50 from a week ago.

UxC's new broker average price fell to $43.32/lb on Monday, down from the $45.41 on November 9. The BAP is a daily calculated midpoint of the bids and offers reported by three brokers -- ICAP, Tullett Prebon, and MF Global.

One analyst said some sellers may not cut prices over the next couple of months, in hopes that the investment fund will be a significant buyer in the first quarter.

But another analyst said he believes the "price looks like it is slipping a bit." The next hard data point on where the price is headed may come later this week when Taiwan Power receives offers on its new request for delivery of 300,000 lb U3O8 equivalent by April 30.

Chu's finding that transferring 1,125 metric tons uranium (2.93 million pounds U3O8 equivalent) over 15 months was announced on Thursday. The bulk of that uranium would be transferred to USEC and DOE said Chu would have to make a second determination for any additional quantities of uranium transferred in 2011 through 2013 to pay for accelerated cleanup work at the the shuttered Portsmouth, Ohio, enrichment plant.

In a preliminary prospectus filed Thursday with Canadian regulators, the new uranium fund, Uranium Investment Corp., said that "while the company's primary investment objective is to achieve long-term appreciation in the value of its uranium holdings, the company intends to generate earnings through the lending, buying and selling of uranium products. The company may also borrow uranium products from third parties to facilitate certain transactions." TradeTech October 31 kept its monthly mid-term at $55/lb.

TradeTech defines this mid-term price as applying to deliveries that begin immediately beyond the 12-month spot delivery window and that occur within one to two years from that point either as stand-alone agreements or as part of a long-term contract. In the long-term market, TradeTech kept its price at $65/lb, and UxC kept its price at $64/lb.

Market analysts and price publishers often have slightly different definitions of spot and long-term deliveries, but spot-market deliveries typically occur within about three to four months (but can sometimes stretch out to 12 months); long-term deliveries are multi- year deliveries that start typically start 18-24 months in the future (but can sometimes start as soon as 13 months out).

The Platts NuclearFuel range for the week was $41-$44.50/lb U3O8.

--Mike Knapik, newsdesk@platts.com