SMU Data and Models

Steel Mill Lead Times Ease Again, Room to Move Lower?

Written by Brett Linton

Steel Market Update’s latest market check revealed that steel mill lead times continue to inch down for sheet and plate products as they move closer to historical norms. On average, lead times declined by 0.2 weeks compared to our early June figures and are down 0.4 weeks compared to one month ago. Lead times over the past two weeks have been roughly in line with what we were seeing in the early weeks of 2022.

Buyers surveyed this week reported mill lead times ranging from 3-6 weeks for hot rolled, 4-9 weeks for cold rolled, 4-9 weeks for galvanized, 4-8 weeks for Galvalume, and 4-7 weeks for plate.

SMU’s hot rolled lead times now average 4.2 weeks, down from 4.3 two weeks prior and 4.6 weeks in late May. The lowest level this year was 3.8 weeks in January and February, and the record low in our ~11-year data history was 2.8 weeks in October 2016.

Cold rolled lead times remain at 6.6 weeks and have been flat since late May. Galvanized lead times declined slightly to 6.5 weeks, down from 7.0 weeks one month prior. They were as low as 6.1 weeks in early March 2022, and our record low was 4.8 weeks in February 2015. The average Galvalume lead time fell from 7.3 weeks to 6.7 weeks, down from 7.7 weeks one month ago.

Mill lead times for plate are now at 5.3 weeks, down 0.2 weeks from our last survey. They have been relatively flat since May. The lowest plate lead time this year was 4.1 weeks in early February, and in our four-year history the lowest we have ever recorded was 3.2 weeks in May 2020.

Approximately 52% of the executives responding to this week’s questionnaire told SMU they were seeing slipping lead times, in line with responses two weeks ago and up from 41% one month prior. Roughly 48% said lead times were stable, up from 42% in our previous survey but down from 56% one month prior. Not a single respondent said lead times were extending, down from the single-digit rate seen since late April. Here’s what a few of them had to say:

“Some mills have falling lead times, but most mills have stable lead times.”

“They cannot get any shorter due to physical limitations.”

“Every mill is calling, trying to put together a deal.”

“Production levels are down slightly, and mills are trying to hold some sort of line on pricing.”

“Stable at slightly below normal levels.”

“Lead times, a terrific leading indicator of pricing, are a bit scary…which doesn’t bode well for any of us.”

“They are already short but continue to peel back in some areas.”

Looking at lead times on a three-month moving average can smooth out the variability in the biweekly readings. As a 3MMA, all products were down between 0.1-0.5 weeks compared to two weeks prior. The current 3MMA for hot rolled is down 0.3 weeks to 4.8 weeks, cold rolled eased 0.1 weeks to 6.9 weeks, galvanized is down 0.2 weeks to 7.1 weeks, Galvalume declined 0.5 weeks to 8.1 weeks, and plate slipped by 0.1 weeks to 5.8 weeks.

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. SMU measures lead times as the time it takes from when an order is placed with the mill to when the order is processed and ready for shipping, not including delivery time to the buyer. 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. To see an interactive history of our Steel Mill Lead Times data, visit our website here.

By Brett Linton,

Brett Linton

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