Robert Sales's questions to USAP leadership • Q2 2024
Question
Inquired about the allocation of premium alloy products between defense and commercial aerospace, the strategy for managing the order backlog and lead times, the expected normalized lead times, and the future trend of the backlog.
Answer
The majority of premium alloys, roughly two-thirds, are directed towards defense applications, with the remaining one-third going into commercial aerospace engines. The company has been actively managing order entry to reduce lead times from a high of 70-80 weeks down to a more manageable 45-50 weeks, which helps customers and enhances competitiveness. A new normalized lead time for the industry is expected to be in the 10-14 month range as demand outpaces supply. The backlog is anticipated to move sideways or slightly down, with potential upside from a recovery in non-aerospace markets.