SMU survey: Direction of mill lead times mixed on holiday season lull

Buyers reported lead times for hot-rolled sheet ranging from 4 to 9 weeks. Contracting by 0.2 weeks from our Nov. 22 market check, hot rolled lead times this week averaged 6.76 weeks. At this time last year, lead times for HRC averaged 4.35 weeks.

Lead times for cold-rolled sheet were between 6 and 12 weeks. The average of 8.50 weeks is just slightly shorter than the last market check’s average of 8.64 weeks. During the same week of 2022, CRC lead times were 5.90 weeks.

Buyers this week reported lead times for galvanized sheet to be between 6 and 12 weeks. The average of 9.15 weeks extended by 0.27 weeks from our market check two weeks earlier. Compared to this week last year, lead times for galv are 3.15 weeks longer than the Dec. 7, 2022, average of 6.00 weeks.

Lead times for Galvalume remain highly extended, averaging 11.00 weeks in this market update. Buyers reported a range of 8 to 15 weeks. The average contracted by a week from our Nov. 22 market check. Galvalume lead times are considerably longer than at this time last year when they averaged 6.07 weeks. The incredible extension in Galvalume lead times since September can be clearly seen in Figure 1 below.

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.

Plate lead times were reported by buyers in SMU’s survey this week to be between 4 and 9 weeks. The average of 6.14 weeks is just slightly longer than the 6.00-week average we saw two weeks earlier. At this time last year, lead times for plate averaged 4.80 weeks.

3MMA lead times

To smooth out the variability in SMU’s biweekly readings, we can look at lead times on a three-month moving average (3MMA) basis.

The 3MMAs for all sheet products were pushed out once again in this week’s market check, coming in at 6.1 weeks for hot rolled, 7.9 weeks for cold rolled, 8.0 weeks for galvanized, and 9.6 weeks for Galvalume.

As you can see in Figure 2, lead times for sheet products had been relatively steady for much of August and September but have been steadily rising since the end of September.

The 3MMA of plate lead times has also been increasing steadily since October, but to a much lesser degree than those for sheet products. Plate’s 3MMA lead time was calculated to be 5.6 weeks as of Dec. 6.

SMU’s survey results

A majority (57%) of manufacturers and service centers in this week’s survey believe current mill lead times are ‘slightly longer than normal.’ Still, 29% would categorize them as ‘normal.’

A majority (57%) also believe that lead times will be flat from current levels two months from now.

Here are a few comments from respondents on whether lead times will be extending, flat, or contracting two months from now:

“Flat. Business will be steady but not overwhelming.”

“I see it contracting. A lack of true demand in the market. Once the OEMs and service centers fill up, demand will drop.”

“From my perspective, no indications that they will be extended at the present time and will remain flat.”

“Contracting. More capacity, less demand.”

“They are at this point increasing but then expected to slow with stabilizing demand and flatten.”

“I think lead times are very extended now, and in two months, they will be contracting based on contract prices and spot prices starting to be aligned.”

SMU’s last report on mill lead times for 2023 will be on Dec. 21.

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.If you’d like to participate in our survey, contact us at info@steelmarketupdate.com.