SMU Data and Models

Spot Check of Mill Lead Times

January 17, 2016

Twice per month Steel Market Update conducts a review of the flat rolled steel markets and one of the items on our questionnaire is how far out are steel mill spot lead times. We also follow lead times as published by the domestic mills to their customers which we share with our readers from time to time. With the recent spat of price increase announcements, one way to ascertain if they are successful is to measure the amount of time it takes for the mill to promise new spot orders at this time compared to where they were prior to the announcements being made.

In the December 29, 2015 issue of the Steel Market Update newsletter we produced an article about mill lead times based on the published lead time sheets shared with us by customers of the steel mills. At that time AK Steel was showing their hot rolled lead times as being 9-10 weeks, Nucor Berkeley at 5-6 weeks and NLMK USA at 3-4 weeks.

As we checked lead times this past week (week ending January 15, 2016) we found AK Steel hot rolled lead times as being (according to their published reports) 9 weeks on hot rolled (essentially unchanged from our December report), Nucor Berkeley was at 5-6 weeks in late December and last week we saw HRC out of Berkeley at 4-5 weeks (one week shorter), NLMK USA hot rolled lead times were 3-4 weeks in late December and this past week were being quoted at 3 weeks.

Cold rolled lead times out of AK Steel were 12-13 weeks on fully processed cold rolled at the end of December. Last week AK CR lead times were reported to be the week of April 11th which is 13 weeks. Nucor Berkeley lead times were 8-10 weeks on cold rolled at the end of December and 7 weeks this past week (week ending March 5th). NLMK USA cold rolled lead times at the end of December were 6-7 weeks and this past week they were being quoted as being “Inquiry” on spot orders with contract tonnage being the week of March 7th (8 weeks).

Galvanized lead times out of AK Steel were 11-12 weeks at the end of December 2015. This past week they were being referenced as the week of April 11th (13 weeks). Nucor Berkeley lead times were 10-11 weeks at the end of December and this past week they were being quoted the week ending March 5th for 54” and narrower and March 12th for 55” and wider (7-8 weeks).

All of the lead time sheets reviewed by SMU were prior to the most recent price increase announcement made by essentially all of the domestic mills. Buyers should consult with their mill representatives to receive the most current lead times for the specific product being ordered.

Service center buyers need to be aware of lead times as well as spot pricing out of your suppliers are apt to change their spot prices quicker the further out lead times extend as it is an indication of the strengthening (or weakness) of the marketplace.

We will be curious to see if last week’s price announcements had any impact on the flow of orders into the mills and lead times.