SMU Data and Models
Steel Mill Lead Times: Shortening
Written by Tim Triplett
October 19, 2017
Flat rolled steel lead times continue to shorten up, a trend under way since early August, according to the service centers and manufacturers who responded to Steel Market Update’s flat rolled steel market trends questionnaire this week. On average, lead times have dipped to nearly three weeks for hot rolled, slightly less than six weeks for cold rolled, right at six weeks for galvanized and a bit over six weeks for Galvalume.
Lead time, which is the amount of time it takes for the domestic steel mills to produce a new order from the time the order was placed, is a rough indicator of the demand trend. The shorter the lead time, the less busy the mill and the weaker the demand. The current shortening lead times would appear to run contrary to recent steel mill price increase announcements.
As of Oct. 15, hot rolled lead times were reported to be averaging 3.16 weeks, down from 3.60 two weeks ago and 4.20 weeks two months ago. A year ago, they were averaging 2.84 weeks.
Cold rolled lead times are down to less than 6.0 weeks (5.77 weeks) from 6.13 weeks a month ago. The cold roll lead time is still nearly a week longer than at this time last year.
Galvanized lead times are averaging 6.0 weeks, down from 6.45 a month ago, but up from 5.61 a year ago.
Galvalume lead times are now averaging about six weeks (6.09 weeks), up from 5.78 weeks in early October, but still below the 6.43 weeks one year ago.
Note: These lead times are based on the average from manufacturers and steel service centers who participated in this week’s SMU market trends analysis. Our lead times do not predict what any individual may get from any specific mill supplier. Look to your mill rep for actual lead times. Our lead times are meant only to identify trends and changes in the marketplace. To see an interactive history of our Steel Mill Lead Times data, visit our website here.
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
Steelmaking raw material costs mixed through May
According to our latest analysis, prices for four of the seven steelmaking raw materials we track increased from April to May. However, select materials saw a collective 1% decline month over month and are down 4% compared to three months ago.
SMU Survey: Buyers’ Sentiment tumbles as caution increases
SMU’s Buyers’ Sentiment Indices resumed their downward trend this week, erasing the modest recovery seen two weeks ago.
Service centers: Mill orders down further in April
SMU’s Mill Order Index (MOI) declined for a second straight month in April after repeated gains at the start of the year, according to our latest service center inventories data.
SMU Survey: Mill lead times edge lower
Sheet and plate lead times declined across the board this week, according to buyers responding to the latest SMU market survey. While our lead time ranges were unchanged compared to mid-April levels, average production times for each steel product we measure have declined from they were two weeks ago.
SMU Survey: Most buyers say price negotiations back on the table
Domestic mills are largely negotiable on spot prices, according to the majority of steel buyers responding to our latest market survey.