NEW YORK Service centers
are reporting extended lead times for certain copper
flat-rolled products as copper mills have yet to add additional
production, staff or shifts despite an uptick in demand.
"Right now Im seeing lead
times for certain light-gauge products at 13 weeks. ... It
means (demand) has picked up sufficiently so the mills are
busy, but (it also means) theyre not bringing on any
additional capacity (or shifts)," one service center source
"I asked that question (to our
mills). I said, It sounds like you need more
shifts. They said they were just happy to be full right
now," a second service center source said, adding that he
isnt aware of any mills adding capacity or staff yet.
A third service center source
confirmed the recent "surge in overall usage for light-gauge
copper," which typically goes "crazy when we have bad weather"
as it is used in electrical distribution.
"Many in the (light-gauge
copper) market saw a surge after Hurricane Sandy," the third
source said, adding that the most recent spike is likely due to
the recent severe snow, ice and windstorms in the United
Light-gauge copper products are
also used in automotive applications, another area that is
Despite improving demand,
service centers dont expect mills to increase production
or capacity any time soon. Equipment is expensivenew
rolling stations cost an estimated $25 million to $30
millionand can take as long as 24 months to bring
Mills are also typically slow to
hire additional employees until it is clear that higher demand
will be sustained, sources said.
"Say (a mill) brought on 30
people, and six months from now they dont need them.
Theyd need to file a WARN (Worker Adjustment and
Retraining Notification) notice. That brings a lot of negative
publicity," the first service center source said. "People are
slower to hire because they know theyll be slower to
fire. (So) rather than invest, the mills will just add a shift
or two and work some overtime. That keeps lead times out."
Still, if demand remains strong
until the summer, producers might have no choice but to hire
additional plant workers, the first service center source
"I think if we get to May or
June and lead times are still out there, you will see
individual companies that will be incentivized to (hire more
people) and go to a multishift, seven-day-a-week schedule," he
Aurubis Buffalo Inc., the
Buffalo, N.Y.-based division of Aurubis AG, Hamburg, Germany,
told AMM that it might add workers later this year (
amm.com, Feb. 11).
Not all service centers are
reporting long lead times, though, with a fourth source saying
hes still between four and six weeks for most copper,
brass and bronze products.
However, the uptick so far this
year is a welcome signthe first service center source
said his company produced a record 50,000 pounds of copper,
brass and bronze products in January.
"We were only 3 percent over our
record, which doesnt sound like much, but our prior
record was in August 2007. That was a peak for many people,"
the first service center source said. "I have to admit,
Im doing the happy dance."