SMU Survey: Mill lead times tick higher

Table 1 below summarizes current lead times and recent trends.

Figure 1 tracks lead times for each product over the past two years. Compared to our previous market check, the lead time ranges remain unchanged this week for all five products.

Survey results

Just over half of the respondents we surveyed this week foresee flat lead times two months from now (51%), while the majority of the remainder expect production times to extend (43%). The remaining few believe lead times will shrink further (6%). This has been the general consensus for our past three surveys.

We also asked buyers to assess the current state of mill production times. More than half of respondents reported that lead times are within typical levels (55%) and the remainder say they are shorter than normal (45%). Not a single respondent said that lead times today are any longer than usual.

Here’s what respondents are saying:

“We see lead times as flat or contracting, which is scary considering they’re already so short.”

“I think in February we see more demand and restocking.”

“New orders are being rolled very quickly.”

“Some value-add products may extend, but doubtful for hot rolled.”

“Will take time for new administration to rebuild lost confidence. I timed mill order to arrive exactly when I needed it. Keeping lowest level of inventory at my processor.”

3MMA lead times

To better capture trends and smooth out variability in our biweekly data, we present lead time data on a three-month moving average (3MMA) basis. As of Dec. 4, 3MMA lead times on both sheet and plate saw little change since early November. Overall, 3MMA lead times have been shrinking since the start of the year, leveling out in recent months near one-year lows.

The hot rolled 3MMA is now at 4.83 weeks, cold rolled at 6.76 weeks, galvanized at 6.96 weeks, Galvalume at 7.20 weeks, and plate at 4.02 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.