Lead Time Movements Vary, Hot Rolled Retreats

Hot rolled lead times are now into late August while other flat-rolled products are into September. We are now into the third quarter of the year and, taking seasonality into consideration, we should begin to see lead times push out in what is typically a strong quarter for steel.

Steel buyers this week reported lead times ranging from 2.5 to 6 weeks for hot-rolled sheet. After extending in our market check two weeks ago, this week’s HR average retreated by 0.23 weeks to 4.48 weeks. The average HR lead time has been below 5 weeks for all of June and July.

For cold-rolled sheet, lead times were said to be between 4 and 10 weeks. Cold rolled lead times lengthened by 0.26 weeks from the previous market check to an average of 6.67 weeks. CR lead times have been extending since late June.

Lead times of 3 to 10 weeks were reported for galvanized sheet this week, with an average of 6.74 weeks. This was an extension of 0.29 weeks from two weeks ago and the longest lead time for galv since the end of April.

For Galvalume, lead times of 5 to 8 weeks were reported this week, with an average time of 6.25 weeks. This was a pullback of 0.42 weeks from the 6.67 weeks reported in the previous market check and the shortest lead time for Galvalume since December.

Buyers this week reported plate lead times between 4 and 9 weeks. After remaining steady at 6.0 weeks in the previous two market checks, the average extended by 0.17 weeks to 6.17 weeks in this week’s check. Lead times for plate have been averaging between 6 and 7 weeks since mid-March.

Let’s take a look at lead times as three-month moving averages (3MMA) to smooth out the variability in SMU’s biweekly readings.

The 3MMA of hot-rolled lead times fell back to 5.1 weeks in this week’s check – that’s the lowest the 3MMA has been since early March.

The 3MMAs of cold rolled and galvanized lead times both fell back for a fifth consecutive market check, with cold rolled coming in at 6.7 weeks and galvanized at 6.6 weeks.

Galvalume’s 3MMA lead time retreated for the fourth consecutive market check to 6.9 weeks.

Plate’s 3MMA had been steady at 6.5 weeks in the three previous market checks. This week it was also largely unchanged at 6.4 weeks.

Nearly two-thirds of buyers surveyed this week (65%) believe lead times in two months will be flat from current levels. That’s down from 72% in the prior market check. More buyers this week are predicting lead times to be contracting–28% vs. 17% in the previous check. Just 7% believe they will be longer, and that’s down from 11% two weeks ago.

“It’ll be flat-to-down, which is one of the main problems. I think imports will keep domestic lead times short,” said one manufacturer.

“Lead times will extend slightly in the next 4-6 weeks, and then will flatten out after that,” one buyer predicted.

“Lead times are already somewhat expended. They will move out in the next month then flatten out the following,” said another.

Are you a steel buyer interested in sharing the numbers you’re seeing and hearing with SMU? Reach out to david@steelmarketupdate.com

Note: These lead times are based on the averages from manufacturers and steel service centers who participated in this week’s SMU market trends analysis. SMU measures lead times as the time it takes from when an order is placed with the mill to when the order is processed and ready for shipping, not including delivery time to the buyer. Our lead times do not predict what any individual may get from any specific mill supplier, so look to your mill rep for actual lead times. To see an interactive history of our Steel Mill Lead Times data, visit our website.

By Laura Miller, laura@steelmarketupdate.com