SMU Survey: Sheet Lead Times Extend While Plate Contracts

SMU’s lead time analysis this week confirms what we’ve been hearing in the market: there aren’t many spot tonnages left for sheet products for the remainder of 2023.

Steel Mill Lead Times This Week

Hot-rolled sheet lead times were reported by buyers in SMU’s survey this week to be between 6 and 8 weeks. The average of 6.9 weeks was pushed out by 0.84 weeks from our market check two weeks ago. This is the longest average lead time for HRC that SMU has recorded since Nov. 11, 2021.

Surveyed buyers reported lead times for cold-rolled sheet ranging from 6 to 12 weeks. Cold rolled lead times extended by 0.73 weeks from two weeks ago to an average of 8.79 weeks. We again have to go back to November 2021 to see a longer average lead time for CRC.

Lead times for galvanized sheet were said to be between 6 and 11 weeks. The average of 8.15 weeks is flat from the reading of 8.12 weeks on Oct. 25. A higher average was last seen during the week of Dec. 9, 2021, according to SMU’s records.

Buyers this week reported lead times for Galvalume to be between 6 and 15 weeks. The average of 10 weeks was pushed out by one week from our last market check. The last week of November 2021 was the last time the average Galvalume lead time was longer.

Note that our data for Galvalume is more volatile due to the smaller sample and market size. If you are a buyer of Galvalume and would like to share your lead time and pricing data with SMU, please contact david@steelmarketupdate.com.

Lead times for plate averaged 5.57 weeks this week, with buyers reporting a range of 4 to 7 weeks. The average contracted by 0.53 weeks from our Oct. 25 market check. Just a month ago, plate lead times were, on average, 5.00 weeks.

3MMA Lead Times

Analyzing lead times on a three-month moving average (3MMA) basis can smooth out the variability in the biweekly readings.

The 3MMAs for all sheet products rose once again in this week’s analysis.

The 3MMAs for hot-rolled, cold-rolled, and coated sheet were calculated to be 5.5 weeks, 7.1 weeks, and 7.3 weeks, respectively. Those are comparable to the 3MMAs registered at the beginning of the summer.

Galvalume’s 3MMA of 8.1 weeks is the highest it’s been since hitting that same point during the week of June 22, 2022.

The 3MMA of plate lead times, meanwhile, was unchanged from two weeks ago at 5.4 weeks, the lowest it has been since March.

SMU’s Survey Says

About 43% of manufacturers and service centers surveyed this week said they would categorize current lead times as ‘normal,’ while 38% said they are ‘slightly longer than normal,” and 16% said they are highly extended.

Regarding the future direction of lead times, about 44% of the executives responding to this week’s questionnaire believe lead times will be flat two months from now. That’s down from 51% two weeks ago. About 34% predict they will be extending (up from 30%), while 21% anticipate contracting lead times (up from 15%).

Here is what a few of our respondents had to say about the direction of lead times two months from now:

“We’ll say ‘contracting,’ and I think this is THE key to watch with regards to how long this [price] rally goes for.”

“They will be done extending in a few weeks but will stay elevated.”

“I think prices will be at a peak and lead times will be coming down in two months.”

“Flat after extending through November and early December.”

“Extending, as long as the mills remain disciplined.”

“Plate lead times will be flat.”

Note: These lead times are based on the average from manufacturers and steel service centers participating 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. Look to your mill rep for actual lead times. To see an interactive history of our steel mill lead times data, visit our website here. If you’d like to participate in our survey, contact us at info@steelmarketupdate.com.