Polyethylene (PE) Pipe & Fittings
Demand for PE pipe and fittings has shown continued strength since the end of 2021, and the backlog has grown as a result. However, new capacity is now starting to come online and mills are realizing efficiency gains deployed early in 2022. In addition, a decline in activity, which is typical for the winter months, has allowed pipe mills to reduce their backlog. Some sizes are now shipping from stock. An uptick in customer project work in the spring of 2023 is expected to put upward pressure on lead times, but this new capacity should help mills meet the demand.
Risers & Meter Sets
Although supply chain woes have eased, riser and meter set assemblies lead times remain at all-time highs due to spotty deliveries of critical component material, such as valves, regulators and cast meter fittings. Fabricators are still digging out from the avalanche of new demand in 2021 and 2022. New manufacturing cells have been added, but the lack of standardization in this segment and the complex fabrication process means fabricators are unlikely to substantially reduce lead times in 2023.
Meter lead times continue to push out beyond 80 weeks as customers remain focused on distribution integrity projects. Meter reading devices reliant on microprocessors are limited. Manufacturers continue to struggle with chip supply. A highly volatile meter supply chain is pushing customers to explore innovative technology as a solution to extreme lead times and to tap into underutilized capacity. As expected, meter manufacturers have announced moderate price increases for material delivered in 2023. More increases are expected in 2024 as manufacturers leverage a large backlog and seek to capitalize on their position in the market.
Regulator availability has improved. Lead times are trending down as manufacturers jockey for market share with new capacity. The low availability of raw material supplied from overseas continues to plague manufacturers. Despite this setback, regulator lead times are projected to improve by the end of 2023 due to enhanced global supply and logistical improvements.
Prices for copper wire declined significantly at the end of 2022, but turmoil in upstream copper markets will push prices back up in early 2023. Copper shortages are anticipated, and rod mills are already placing wire manufacturers on allocations. Unless copper supply improves, wire prices and lead times may reach new highs in 2023.