NEW YORK Lead times for copper flat-rolled products have extended in the first few weeks of the year, service center sources told AMM.
It is the first time that lead times for light- and intermediate-gauge products have lengthened since 2010, AMM has been told.
"Weve seen them jump out. For most of the fourth quarter, lead times were between five and six weeks. But now, for certain light- and intermediate-gauge products, theyre out to April," one service center source said.
"Our supply side seems to be enjoying a rebound in business based on the lead times," a second service center source said. "In the fourth quarter, lead times were between three and five weeks, but now, for flat-rolled products in general, theyre out to eight weeks."
Improving demand in the U.S. construction sector and strong forecasts from the automotive sector are likely reasons for the extended mill lead times, sources said (amm.com, Jan. 24). Light- and intermediate-gauge copper is used in residential and commercial lighting connectors, as well as automotive lighting applications.
Its a positive sign for the copper industry, which has suffered from weak demand following the 2008 financial crisis.
"Thats typically a good omen for the entire pipeline. If the mills are busy, that means there is some demand out there," the second service center source said.
"When major mills do this, it tells me theyve gotten orders, which is positive," the first service center source said.
In addition to construction and automotive, the sharp uptick in gun sales at the end of 2012which would boost demand for brasscould be a factor in extending lead times, service center sources said.
Firearm background checks increased 25 percent to more than 2 million in November from 1.6 million in October, the highest monthly figure in more than 14 years, according to statistics from the National Instant Criminal Background Check System (NICS), a division of the Federal Bureau of Investigation.
While the data does not represent the number of gun sales, it shows the domestic firearms business is unquestionably picking up, said the first service center source, who estimated that ammunition companies purchase between 20 million and 30 million pounds of brass annually.
"Id be foolish to discount this jump in lead times, to say it had nothing to do with ammunition sales," the first service center source said. "New records are being set with gun sales. (More people) are practicing shooting (which means) more people are buying shells."
Long lead times could be short lived, however. "Im concerned these increasing lead times are more seasonal. (Mills) could be getting building components ready for spring, and then we (may) see a retraction or shortening of lead times as we march into spring," the first service center source said.
Still, this year likely will be more active than in recent memory.
Although a third service center source said that his lead times are still around four weeks, he anticipates business will pick up soon. "Copper is in a lot of things. As long as you keep your nose to the grindstone, youll be fine," he said.