SMU Data and Models
Flat Rolled Lead Times Continue to Slide
Written by Tim Triplett
June 8, 2017
Flat rolled lead times have continued to decline over the past 10 weeks, according to this week’s SMU Flat Rolled Steel Market Trends questionnaire. Buyers and sellers of flat rolled steel report shorter lead times than in early May. Lead times on all products are considerably shorter than one year ago.
Shorter lead times are a key indicator of future steel pricing and tend to reflect weakening demand. The shorter the lead time, the more pressure on flat rolled steel pricing. This is especially important to note when considering the domestic steel mill price announcements of $30 per ton earlier this week. We will have to see if their announcement gets buyers “off their hands” or if inventories are balanced and there is no need to expedite new orders, thus keeping lead times stable. The clear outlier is the Section 232 investigation and whether foreign steel buyers move some of their purchases to the domestic steel mills. That could potentially create a jump in lead times. SMU will be watching this carefully in the days and weeks ahead.
Hot rolled lead times currently average around 3.88 weeks, down from 4.37 weeks at the beginning of May. One year ago, HRC lead times were 5.43 weeks.
Cold rolled lead times also dropped to an average of 6.03 weeks, down from 6.46 weeks in early May and 8.04 weeks a year ago.
Galvanized lead times average 6.42 weeks, down from 6.82 weeks on May 1. One year ago, around June 1, 2016, GI lead times averaged 8.25 weeks.
The story is the same for Galvalume, where lead times dipped to 6.25 weeks from 6.89 weeks a month earlier. One year ago, AZ lead times were reported to be 8.38 weeks.
SMU Note: The data for both lead times and negotiations comes from only service center and manufacturer respondents. We do not include commentary from the steel mills, trading companies, or toll processors in this particular group of questions.
To see an interactive history of our Steel Mill Negotiations data, visit our website here.
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
Service centers: Mill orders recover in June
SMU’s Mill Order Index (MOI) rebounded in June after declining for three straight months. The gain complemented a modest boost in service center shipments for the month, according to our latest service center inventories data.
Apparent steel supply remained high in May
The volume of finished steel entering the US market remained elevated in May, in line with April figures, according to SMU’s analysis of Department of Commerce and American Iron and Steel Institute (AISI) data
June service center shipments and inventories report
Flat rolled = 55.8 shipping days of supply Plate = 59.4 shipping days of supply Flat rolled US service centers’ flat-rolled steel supply edged down in June with a modest boost to shipments month on month (m/m). At the end of June, US service centers carried 55.8 shipping days of flat roll supply, down from […]
SMU Scrap Survey: Sentiment Indices rise
Both current and future scrap sentiment jumped this month, though survey participants reported responses before key trade news was announced.
SMU Survey: Sentiment splits, buyers have better view of future than the present
SMU’s Steel Buyers’ Sentiment Indices moved in opposite directions this week. After rebounding from a near five-year low in late June, Current Sentiment slipped again. At the same time, Future Sentiment climbed to a four-month high. Both indices continue to show optimism among buyers about their company’s chances for success, but suggest there is less confidence in that optimism than earlier in the year.