Leadtime Report
Staff -- Purchasing, 1/15/2004 2:00:00 AM
Leads confirm memory rebound
Leadtimes for SRAMs, which are used in cell phones and networking equipment, are now stretching. The glut of SRAMs and other semiconductors that plagued the industry for two years has now been worked off. When inventory levels were high, suppliers cut production and have been reluctant to boost output even though demand has started to pick up. According to purchasingdata.com, there have been spot shortages; percentage of SRAM buyers reporting leadtimes in excess of 11 weeks has crept up from a low of 21% in July to 28% in December.
PE markets tighten
Over the past two years, national average delivery speeds for polyethylene (PE) resins have progressed gradually from a range of 5-15 days to a range of 10-20 days. Coincidentally, PE prices have risen in the vicinity of 25¢/lb for most of the grades tracked monthly by purchasingdata.com, but that hasn't been enough to offset the margin hit that producers took in 2003 due to high costs for hydrocarbons and energy. Without price increases in 2004, the rationalization of capacity should continue, pushing leadtimes out even further.
Watch flat-rolled leads
There's an important trend shift in flat-rolled steel supply. While national average leadtimes remain considerably shorter than in 2002 (see chart), the latest report from purchasingdata.com shows flat-rolled leadtimes creeping out from a low range of 2-4 weeks in the early fall to an average of around six weeks by December. The turnaround in leadtimes is consistent with supply-tightening actions by mills seeking to boost prices—at least over the short term before the 201 demise affects import levels.
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