NEW YORK Lengthening lead times at U.S. copper and brass product mills are encouraging more buyers to consider imports, but at least one major domestic mill source said hes optimistic the trend will be short-lived.
The recent extension of lead times for copper and brass productsout to as far as 18 weeks for some productshad led service centers to speculate that original equipment manufacturers (OEMs) may turn to imports to meet their customers demands, which could take business away from domestic mills (amm.com, March 26).
Imports of copper sheet and strip may hit U.S. shores for a few months, although one domestic mill source said it will be short-lived. "There might be a short-term trend," he told AMM. "We dont want that to happen. Of course we dont want to see business go somewhere else. But we understand how it can happen in the short term."
Lead times for medium-gauge copper products are anywhere from eight to 14 weeks, out from four to six weeks previously, while lead times for light-gauge material are as long as 18 weeks vs. 12 weeks previously. Similarly, brass product lead times have stretched to 16 to 17 weeks from eight weeks, market participants told AMM in late March.
Service centers attribute drawn-out copper strip lead times to strong automotive demand and a recovering housing sector, while the brass is being consumed largely by ammunition makers as consumers continue to stock up on bullets fearing stricter gun laws on the horizon.
A service center source confirmed that mills are talking about imports and how they will impact their business. "Theyre talking to us about almost every product," he said, noting that imports of a variety of copper and brass products, including copper rod, sheet and strip, likely will increase in the next few months.
Although the mill source believes lead times "will straighten themselves out" after the "natural drop-off in demand" in the summer, he said domestic mills are still evaluating if its worth adding staff or boosting capacity to avoid losing business to imports.
Aurubis Buffalo Inc. told AMM earlier this year that it was considering hiring more workers at its Buffalo, N.Y. mill (amm.com, Feb. 11).
These are not decisions mills make lightly, however, the mill source said. "You can restart existing equipment, you can add personnel. But you always have to be wary. Its expensive to restart machines and hire staff. And if the demand doesnt stay, youre caught having to go the other way, and its also expensive to get rid of people and mothball equipment. Thats the dilemma for a supplier. Will demand last? Is it worth starting up capacity and hiring more people? Or is it better to restrict it and be happy with a full plant?"
Not everyone believes OEMs will turn to imports.
"There may be some pickup in business where imports are actually quicker than domestic (material), but I think everyone is attune to the scheduling to meet their requirements," a second service center source said. "Its not like this just happened overnight."
Imports of copper and brass sheet, strip, plate and foil products dipped to 8.89 million pounds in January from 12.73 million pounds in December, according to Copper and Brass Fabricators Council data.