SMU survey: End-of-year lead times show mixed buying patterns

Buyers reported lead times for hot-rolled sheet ranging from 5 to 8 weeks. Extending by 0.14 weeks from our Dec. 7 check, hot rolled lead times this week averaged 6.89 weeks. At this time last year, lead times for HRC averaged 4.9 weeks.

Lead times for cold-rolled sheet were between 6 and 11 weeks. The average of 8.94 weeks is just slightly longer than the last market check’s average of 8.50 weeks. CRC lead times were 7.5 weeks during the same week in 2022.

Buyers this week reported lead times for galvanized sheet to be between 5 and 14 weeks. The average of 8.88 weeks contracted by 0.27 weeks from our market check two weeks earlier. Lead times are further out compared to the 7.5-week lead time in the same week last year.

Lead times for Galvalume remain longer than other substrates. Buyers reported a range of 7 to 14 weeks. The average of 10 weeks is one week shorter than the 11-week lead time during the last check. Galvalume lead times are considerably longer than at this time last year when they averaged 8.8 weeks. The extension in Galvalume lead times since September is shown 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 6.89 weeks is longer than the 6.14-week average we saw two weeks earlier. At this time last year, lead times for plate averaged 5.4 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 6.5 weeks for hot rolled, 8.3 weeks for cold rolled, 8.4 weeks for galvanized, and 10 weeks for Galvalume.

Note 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 6 weeks as of Dec. 21.

SMU’s survey results

A majority (62.5%) of manufacturers and service centers in this week’s survey believe current mill lead times are ‘slightly longer than normal.’ Still, 31.25% would categorize them as ‘normal.’

Most survey respondents (45.95%) 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:

“Lead times are long and will remain so.”

“I see this movement ending in mid February. The present market is borrowing from the future. Means a quicker end than March or April.”

“Buyers will outpace their demand. Planned record auto production will not be realized.”

“I think lead times will be coming down as prices will be under pressure.”

“I think we’ll see more domestic capacity in combination with imports arriving in late Q1.”

As this is the last lead time report of 2023, we’ll soon see what the beginning of 2024 has in store for us.

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.