SMU Survey: Little movement in mill lead times, remain short

Lead times for hot-rolled steel remain in the mid-four-week range on average. Tandem products are hovering around six-and-a-half to seven weeks. Plate lead times remain near four weeks. Overall, lead times remain near some of the shortest levels witnessed this year.

Table 1 below summarizes current lead times and recent trends.

Compared to our Oct. 23 market check, the upper and lower limits for just one of our lead time ranges have changed this week; the longest lead time considered in our cold-rolled range decreased from nine weeks to eight weeks.

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

Survey results

Nearly half of the buyers we polled this week believe lead times will be flat two months from now, similar to recent surveys but down compared to the summer months. Almost as many participants forecast production times to extend further (47%), a rate we have seen increase across our last few surveys. The small remainder believe lead times will shrink further. The portion of buyers with this response has been dwindling in recent months.

We also asked buyers how they classify current mill production times. The majority (55%) responded that lead times are shorter than normal, while 38% said they are within typical levels. A small portion of buyers think lead times today are slightly longer than normal (8%).

Here’s what respondents are saying:

“Lead times will extend, demand should be increasing due to a better business environment.”

“Don’t see a major spike, but with demand coming back and potential large deals being done in Q4, lead times should start rising.”

“Lead times are already short and I only see more capacity coming online (and/or coming back online).”

“Not expecting large order book surges to push lead times out.”

“With BRS2 hitting its stride by January and imports being maintained, lead times should tread water.”

“Lead times will be flat as open capacity is plentiful.”

“Winter months bump.”

“Come 2025, service centers will have to start restocking.”

3MMA lead times

To smooth out the variability seen in our biweekly readings and better highlight trends, we present lead time data on a three-month moving average (3MMA) basis. Through Nov. 6, 3MMA lead times ticked up slightly on sheet products and inched lower on plate. Overall, 3MMA lead times have trended downwards since February and remain near one-year lows. Sheet 3MMA lead times have begun to level out in recent months, while plate 3MMA lead times continue to slide lower.

The hot rolled 3MMA is now at 4.83 weeks, cold rolled at 6.72 weeks, galvanized at 7.05 weeks, Galvalume at 7.17 weeks, and plate at 4.04 weeks.

Figure 2 highlights lead time movements since the start of 2020.

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.