SMU Data and Models
Steel Mill Lead Times: Beginning to Extend
Written by Tim Triplett
July 11, 2019
Lead times for steel delivery have moved out a bit in the past two weeks, lending support to recent mill price increases. The average lead time for hot rolled has moved up to nearly four weeks, cold rolled to nearly six weeks, and coated steels to more than six weeks. Plate lead times are bucking the flat rolled trend and are slightly lower than what we reported a couple of weeks ago.
The mills have announced two price hikes in the past two weeks totaling $80 per ton. The market is keeping a close watch on lead times to gauge the likelihood the mills will hold firm in their pursuit of higher prices. Note that Steel Market Update began gathering this data on Monday, just before the mills’ latest price increase announcements on Tuesday and Wednesday.
Lead times for steel delivery are a measure of demand at the mill level. The longer the lead time, the busier the order activity at the mills, and the less likely they are to discount prices.
Hot rolled lead times now average 3.88 weeks, up from 3.43 weeks in mid-June. Hot rolled lead times were much longer in the high-demand period this time last year at 5.39 weeks.
Cold rolled lead times, at 5.72 weeks, show an uptick from 5.32 weeks in the data from the mid-June questionnaire. Cold rolled lead times at this time last year were two weeks longer.
Average lead times for galvanized have extended to 6.22 weeks, up from 5.84 weeks in SMU’s last market canvass. Galvanized lead times were a week and a half longer in early July 2018. The current average lead time for spot orders of Galvalume has lengthened to 6.13 weeks from 5.88 weeks.
Lead times for spot orders of plate steel are moving in the opposite direction, getting shorter as demand for plate moderates after a lengthy period of high demand. Lead times for spot orders of plate now average 4.38 weeks, down from 4.50 weeks in mid-June.
If lead times don’t continue to extend over the coming weeks, that’s a sign the mills are having difficulty filling their order books at the higher prices.
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
SMU’s September at a glance
SMU’s monthly review provides a summary of important steel market metrics for the previous month. This latest report includes data updated through Sept. 30.
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: Steel Buyers’ Sentiment Indices remain optimistic
SMU’s Steel Buyers’ Sentiment Indices remain in positive territory and continue to indicate optimism amongst steel buyers.
SMU survey: More buyers report mills willing to talk price
Over three quarters of the steel buyers participating in our market survey this week reported that mills are negotiable on new order prices
SMU survey: Steel mill lead times remain short
We saw a slight upward movement in some products compared to early September, but nothing substantial enough to signal a shift in the market.