Copper lead times out, raising import fears

NEW YORK — Service centers are reporting extending lead times for all copper and brass products on the back of strong demand from the automotive and housing sectors, which could encourage some buyers to turn to imports.

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 certain light-gauge material are out as long as 18 weeks from 12 weeks previously, service centers told AMM.

Copper and brass mill Aurubis AG, Hamburg, Germany, said in a March 20 letter that "strip products are in higher demand, especially in the U.S."

Service centers confirmed the trend. "We have seen lead times move out quite a bit. In general, lead times are probably out to 12 to 14 weeks," a source at one service center told AMM. "Strip is where we’re seeing most of the demand. Automotive is still strong and housing is holding its own."

Copper strip is used in automotive radiators, heat-exchanger fins, roofing sheets and stamping.

"If you’re ordering something for the first time out of a prior arrangement, you’re going to wait until Aug. 2," a second service center source said. "We’re seeing (increasing) demand as automotive and housing continues to strengthen and solidify."

"Lead times are out in the eight- to 12-week range," a third service center source said, although he added this is more the case for brass products rather than copper.

Lead times for brass products have stretched to 16 to 17 weeks in some cases from eight weeks previously as ammunition sales rise on the back of fears of tightening firearm controls.

Firearm background checks totaled 2.3 million in February and 2.5 million in January, staying above the 2-million mark every month since October 2012, according to statistics from the National Instant Criminal Background Check System, a division of the Federal Bureau of Investigation. While the statistics do not represent gun sales, they show that consumer demand has undoubtedly increased, sources said.

"There are a lot of first-time (gun) buyers out there. People are stocking up on bullets because they’re concerned about gun controls," the second service center source said. "I’ve heard someone at a brass mill say President Obama is their best salesman right now."

However, "once everyone has the bullets they want" the ordinance business could teeter off later this year, bringing brass lead times in, he said. "It’s in a bubble right now."

Still, lead times likely will stay out for the next few months, particularly if mills do not add staff.

"Two of the four major mills in the U.S. are not expecting ... lead times to get back to normal until the beginning of the summer. They’re saying July," the first service center source said.

The long lead times could encourage original equipment manufacturers (OEMs) and service centers to turn to copper product imports to meet their customer orders.

"With domestic lead times out so far, some (OEMs) may probably find it’s quicker to go overseas, which I’m sure concerns the domestic producers," the third service center source said.

"If the customer is big enough, they may look to get copper overseas," the second service center said. "That could hurt the domestic industry."

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