SMU Data and Models

Steel Mill Lead Times Moving Out: Steel Prices to Follow?

Written by John Packard

Spot lead times have begun to move out according to the lead time sheets shared with customers this week by their domestic mill suppliers. The most strength was seen in cold rolled and coated steels while hot rolled lead times remained stuck at 3-4 weeks in most cases. Steel buyers continue to prognosticate that there will be further price movement on flat rolled steel after the first of the New Year.

An AK Steel customer send Steel Market Update a note with their latest lead time sheet attached and a question: “Reality vs. self-promoting tightness?”

With AK Steel in the process of taking down the hot end of their Ashland steel mill the expectation has been that their lead times would begin to move out. AK has not been a big player in the spot markets for a number of months and has concentrated their focus on their contract customers.

On Monday of this week, AK Steel was telling their potential spot customers that they were out to the week of February 22nd on new hot rolled orders (9-10 weeks), the week of March 21st for fully annealed cold rolled (12-13 weeks) and the week of March 14th for both HR base and CR base galvanized (11-12 weeks).

SMU also got a look at the latest lead times out of Nucor Berkeley which is quoting their spot customers 5-6 weeks on hot rolled, 8-10 weeks on fully annealed cold rolled and 10-11 weeks on hot dipped galvanized orders.

We heard from a Steel Dynamics (Butler) customer who reported hot rolled lead times as being 3 weeks (week of 1/11) while cold rolled and galvanized are sold out for January with their February order book not yet being open. It is normal for SDI to run tight lead times out of Butler so having them sold out on CR and GI for the month of January is a sign of a stronger order book than what they were seeing a couple of months ago.

We understand SDI Columbus lead times on coated are on an Inquire only basis.

The Techs (which are owned by Steel Dynamics and are all galvanized conversion mills) were showing their lead times as being  the week of 1/31 out of MetalTech (5-6 weeks) and one week longer out of their NexTech and GalvTech mills.

We understand that California Steel is sold out through February and has not yet opened their March order book.

CSN (Terre Haute) reported their lead times on galvanized to be the last week of January (5 weeks). This is much improved as just prior to the price announcements they reported their lead times to be less than 2 weeks.

NLMK USA lead times on hot rolled are reported to be 3-4 weeks out of Portage and 4 weeks out of their Farrell facility. Cold rolled lead times are 6-7 weeks for fully annealed product out of Farrell and 7-8 weeks for hot dipped galvanized out of Sharon Coatings.

We heard that Ternium (Louisiana) lead times for spot is the second week of February (7 weeks).

Our twice monthly lead time reports are based on the average results from those participating in our flat rolled market analysis (next one starts next Monday). What we are reporting above comes from either the domestic mills themselves to their customers (or to a request we have made to the mill directly) or from one (or more) of a mill’s customers reporting what they are being told.

A steel executive with a Midwest based service center told us about the issues they were having getting all of the steel that one of their customers required. He reported no changes in pricing but added, “Anyone who doubts these increases…[is not paying attention to lead times].

From what we can see with the exception of hot rolled, cold rolled and coated products are beginning to move out and buyers should be prepared for either another round of increases in early January or, a push to collect all of the announced increases (and extras) that may not yet have been collected.

One of the mills told us, “Two weeks from now will be the week of truth.”

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