SMU Survey: Mill lead times tick higher after late-May lows

The average lead time for hot-rolled coil is now just over four and a half weeks. Cold-rolled and coated products are currently between six and seven weeks. Plate has risen to just over five and a half weeks.

Table 1 summarizes current lead times and recent changes by product (click to expand)

Compared to our May 28 market check, the ranges for three of our five lead times stretched higher this week:

• Cold rolled: The longest lead time increased from eight weeks to nine.
• Galvanized and plate: The longest lead time rose from seven weeks to eight.

Buyers predict stability

Most buyers (74%) still expect lead times to hold steady over the next two months, nearly unchanged from late-May. Among the remainder, 17% expect lead times to extend, more than double the 9% reported two weeks ago. Only 9% expect further contractions, down from 18%.

Here are some of the comments we collected:

“Steady, we do not see an increase in steel demand over the short term.”

“As much as I’ve seen a recent spike in sales, I’m not sure that there’s much if any increased demand.”

“Flat, supply will maintain.”

“They will expand as domestic demand increases.”

“Extend in near term, depending on outages could be up in two months.”

“They will expand in the next few weeks, then level off.”

“We’re still seeing domestic lead times slip and I think that continues.”

“I feel they will start to contract after extending a little in June.”

Trends

Lead times can be calculated on a three-month moving average (3MMA) to better highlight trends (Figure 2). All of our sheet 3MMAs declined this week for the third-consecutive survey, while plate continued to inch upward, as it has since the start of the year.

Over the past three months, the average lead times by product were: hot rolled at 5.08 weeks, cold rolled at 6.81 weeks, galvanized at 6.78 weeks, Galvalume at 7.12 weeks, and plate at 5.56 weeks.

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. Consult 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.