International Steel Prices

Steel Mill Lead Times Rise Across the Board

Written by Brett Linton

Steel mill lead times increased again this week, extending by an average of 0.3 weeks across all five products we track. Recall that lead times for hot-rolled, cold-rolled, and galvanized products were at or near multi-year lows in our late November market check.

Lead times have increased an average of 0.8 weeks compared to levels one month ago. Following their April peak, sheet lead times were relatively stable at low levels from July to November. Plate lead times had gradually moved lower over the past six months but ticked up in mid-November.

Steel buyers reported mill lead times ranging from 4 to 6 weeks for hot rolled and plate, and 5 to 8 weeks for cold rolled, galvanized, and Galvalume.

SMU’s hot-rolled lead time extended by 0.3 weeks to 4.7 weeks, the highest level since May. Four weeks ago, our hot-rolled lead time reached a low of 3.9 weeks. The shortest hot-rolled lead time recorded this year was 3.8 weeks in January/February. Recall the record low in our ~11-year data history was 2.8 weeks in October 2016.

Cold-rolled lead times also lengthened by 0.3 weeks to 6.2 weeks and are now at the highest level since early September. Cold-rolled lead times fell to 5.2 weeks in late November, the lowest reading since May 2020.

Following the same trend, galvanized lead times increased 0.3 weeks to 6.3 weeks and are now at a 16-week high. Galvanized lead times are up almost one full week compared to one month ago. Like other products, our galvanized lead time in late November was the shortest seen since April 2020. The record low was 4.8 weeks in February 2015.

Galvalume lead times rose 0.4 weeks to 6.5 weeks. This is up one full week compared to levels one month ago. Note that Galvalume figures can be volatile due to the limited size of that market and our smaller sample size.

Plate lead times rose 0.2 weeks to 5.0 weeks, their highest reading since mid-August. In early November, plate lead times were 4.2 weeks – the lowest lead time recorded since February (4.1 weeks). In our four-year history for plate, the shortest plate lead time we have on record is 3.2 weeks in May 2020.

When asked about the future direction of lead times, 66% of executives responding to this week’s questionnaire expect lead times to be relatively flat into February. This is up from 57% in our previous survey. Twenty-eight percent of buyers think lead times will extend, down from 36% two weeks ago. Six percent expect lead times to contract, in line results from as far back as late October. Premium members can view a longer history of this data series and others by exploring the market trends report we will publish tomorrow afternoon, Dec. 23.

Here are comments from a few respondents:

“[In two months] I think that is when buyers will start pushing back.”

“Mills will be unsuccessful if they shorten and play spot games.”

“Domestic supply will have little import competition.”

“Leads times appear artificially inflated.”

“Will grow in 60 days, flatten out thereafter.”

“We are expecting to see mill lead times remaining very short – which is a problem for any sort of pricing rally.”

Looking at lead times on a three-month moving average (3MMA) basis can smooth out the variability in the biweekly readings. As a 3MMA, lead times for all products were flat to down compared with late November. The latest 3MMA lead time for hot rolled held steady at 4.1 weeks. It has remained in this territory since August. Cold-rolled lead times were flat at 5.6 weeks, the shortest since July 2020. Galvanized lead times remained at 5.9 weeks for the second consecutive survey, the lowest level seen since August 2020. Galvalume lead times fell 0.2 weeks to 5.8 weeks, the shortest in more than seven years. Plate lead times held steady at 4.4 weeks, the lowest 3MMA measure recorded since September 2020.

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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