SMU survey: Steel mill lead times remain short

Overall, current lead times for all products remain near some of the shortest levels witnessed this year.

Table 1 below summarizes current lead times and recent trends.

Compared to our Sept. 11 market check, the upper and lower limits of our lead time ranges this week have changed:

• The longest lead times in both our cold-rolled and galvanized ranges increased from eight weeks to nine weeks.
• The longest hot-rolled lead time considered in our range declined from seven weeks to six weeks.
• The shortest lead time in our galvanized range shrunk from six weeks to five weeks.

Here’s what buyers are saying:

“Lead times are already pretty short, the fall outages haven’t changed that. We think they’ll retreat later into Q4.”

“I think they are extended a bit now because of outages but will contract as outages finish and holiday buying slows down.”

“Things MAY start to pick up once the presidential election is decided.”

“[Future lead times] depend on trade actions and election outcomes.”

“[Extending due to] mill shutdowns for maintenance.”

Figure 1 below tracks lead times for each product over the past two years.

Survey results

Two-thirds of the companies we surveyed this week believe lead times will be flat two months from now, up from 62% in our prior survey. Only 20% predicted production times would extend further (down from 24% in mid-Sept.). The remaining 13% of buyers expect lead times to shrink by November (vs. 14% two weeks prior).

We also asked buyers how they classify current mill production times. The majority continue to respond that they are either shorter than normal (44%) or within typical levels (42%). A small portion of buyers said lead times are slightly longer than normal (14%).

3MMA lead times

Another way to view lead time data is on a three-month moving average (3MMA) basis. This can smooth out the variability seen in our biweekly readings and better highlight trends. Through Sept. 25, 3MMA lead times ticked down on plate products, moved a hair lower for hot rolled and cold rolled, and slightly extended for coated steels. All 3MMA lead times have overall trended downwards since February and remain near one-year lows.

The hot rolled 3MMA is now at 4.78 weeks, cold rolled at 6.66 weeks, galvanized at 7.03 weeks, Galvalume at 7.05 weeks, and plate at 4.26 weeks.

Figure 2 highlights lead time movements across the past four years.

Note: These lead times are based on the average from manufacturers and steel service centers participating in this week’s SMU market trends analysis survey. SMU measures lead times as the time it takes from when an order is placed with the mill to when it 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.