SMU Data and Models
Steel Mill Lead Times: Moving Out
Written by John Packard
May 10, 2015
The domestic flat rolled steel mill lead times have begun to move out, according to the results from our flat rolled steel analysis questionnaire conducted this past week. We are seeing movement on all four products: hot rolled, cold rolled, galvanized and Galvalume. Lead times had bottomed in January and February and we started to see some extension of the amount of time it takes to get new orders produced in March and April just prior to the price increase announcements having been made by ArcelorMittal, Nucor, NLMK USA and others.
Since the announcements we have seen a bump in lead times as customers that need to book orders flock to the mills to protect themselves.
Hot rolled lead times, which bottomed out at an average of under three weeks, are now averaging three and a half weeks. This is much better than what we have seen so far this year but well below the 5.0 week lead time average we reported back in May 2014 (remember all of the production issues which existed at this point last year).
Cold rolled lead times, which were less than five weeks for all of 1st and early 2nd Quarter 2015, are now averaging 5.65 weeks according to our survey respondents. Cold rolled lead times one year ago average just over seven weeks (7.18).
Galvalume lead times, which at the beginning of February 2015 averaged just over five weeks are now being reported as averaging 6.11 weeks. One year ago AZ lead times averaged 6.63 weeks.
The extension of lead times is a good sign for the domestic steel mills, and for the industry in general, as longer lead times will firm up pricing.
As one domestic conversion mill told us recently during a discussion on how they have been able to hold the line on new pricing, “[We] eliminated the low end of pricing, but the big buyers have not yet come back to buy the next round. We are patient though as our book is solid… Seems like we can afford to be patient for now.”
To view the interactive history of the graphic above, visit the Steel Mill Lead Times page on the Steel Market Update website here.
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Past survey results are also available under that selection. If you need help accessing the survey results, or if […]
SMU Survey: Current Steel Buyers’ Sentiment slips to multi-year low
SMU’s Current Sentiment Index suggests steel buyers are still optimistic about their businesses’ ability to succeed in today’s market, though their confidence has significantly declined compared to recent months.
SMU Survey: Overall mill negotiation rate at highest point on record
More than nine out of every 10 steel buyers polled by SMU this week reported that mills are flexible on prices for new orders. Negotiation rates have been strong since April and on the rise since early September.
SMU Survey: Mill lead times tick lower
Mill lead times have declined on both sheet and plate products this week, according to steel buyers responding to our latest market survey,
Steelmaking raw material prices trend higher in October
Steelmaking raw material prices strengthened for all but one product in October, a change in pace compared to recent months, according to SMU’s latest analysis.