SMU Data and Models
Mill Lead Times & Negotiations: Trends are Reversing Themselves
Written by John Packard
September 5, 2013
Mill lead times, as reported through our proprietary steel market survey, are shrinking on three of the four flat rolled product categories followed by Steel Market Update. Hot rolled lead times which were referenced on a weighted average basis at 4.5 weeks at the beginning of August are now at 4.0 weeks. However, the 4.0 weeks is still much better than what we saw one year ago when buyers and sellers pegged HR at 3.35 weeks.
Galvanized lead times shrunk from 6.18 weeks to 6.07 weeks but better than the 5.33 weeks of one year ago. Galvalume lead times moved from 6.75 weeks down to 6.55 weeks which continues to be better than the 6.44 weeks referenced one year earlier.
The one item which bucked the trend was cold rolled which came in at 6.20 week lead times up from 5.96 weeks two weeks ago and well above the 5.33 weeks of one year ago.
Negotiations Break Through 50% Levels
On every product but Galvalume, buyers and sellers of steel reported mills as being more willing to negotiate spot prices with their customers. Hot rolled, cold rolled and galvanized were all reported as having exceeded 50 percent of the customers reporting mills as willing to negotiate on those products. The one exception was Galvalume where our survey found only 11 percent of the customers reporting mills as willing to negotiate pricing.
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU Steel Demand Index still lags
The Steel Demand Index now stands at 42, up from 38.5 in early July, but off from a four-year high of 65.0 in late February.
SMU Price Ranges: Sheet prices tick lower, but floor remains high vs. ’24
Sheet prices slipped again this week amid discounting from certain mills and ongoing concerns about demand.
SMU Survey: Steel Buyer Sentiment Indices soften
SMU’s Steel Buyers’ Sentiment Indices eased this week, both approaching multi-year lows.
SMU flat-rolled market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members.
SMU Survey: Mill lead times remain short
Steel mill lead times on sheet products contracted across the board this week compared to early July, while plate production times moderately extended, according to steel buyers responding to this week’s market survey.