SMU Data and Models

SMU survey: Mill lead times stretch out marginally

Written by Brett Linton


Steel mill lead times inched up this week for most sheet and plate products, according to buyers responding to our latest market survey. Compared to late-September, lead times have marginally extended for all products other than galvanized. Overall, lead times remain near some of the shortest levels witnessed this year.

Production times are mixed this week compared to those seen one month prior, but higher for all products vs. levels three months ago. For sheet products, lead times for hot-rolled steel remain around five weeks on average and tandem products are all hovering around seven weeks. Plate lead times continue to register about four weeks, around where they have been since mid-July.

Table 1 below summarizes current lead times and recent trends.

Compared to our Sept. 25 market check, the upper and lower limits for some of our lead time ranges this week have changed:

  • The longest lead time considered in our hot-rolled range increased from six weeks to seven weeks.
  • The shortest lead time in our cold-rolled range decreased from five weeks to four weeks.
  • The longest lead time in our galvanized range increased from nine weeks to 10 weeks.

Survey results

Just over half of the companies we surveyed this week believe lead times will be flat two months from now, down from 67% in our prior survey. A third expected production times to extend further (up from 20% in late-Sept.). The small remainder (9%) believe lead times will shrink further (vs. 13% two weeks prior).

We also asked buyers how they classify current mill production times. The majority continue to respond that they are either shorter than normal (47%) or within typical levels (44%). A small portion of buyers said lead times are slightly longer than normal (9%).

Here’s what respondents are saying:

“Domestic lead times have started to slip. We expect that to continue due to poor demand across the board.”

“Normal cyclical curve for the steel market. Mill outages in December will push out lead times.”

“I think once the presidential election is decided, people/businesses will have some direction and business will pick up a bit.”

“In the next 30 days, they go down and then stabilize as buying picks up.”

“I expect a lead time push because of a rebound of steel demand.”

Figure 1 below tracks lead times for each product over the past two years.

3MMA lead times

One way to smooth out the variability seen in our biweekly readings and better highlight trends is to view lead time data on a three-month moving average (3MMA) basis. Through Oct. 9, 3MMA lead times increased ever-so-slightly on sheet products and marginally eased on plate products.

On a 3MMA basis, sheet lead times have begun to flatten out in recent months, while plate lead times continue to shrink. Generally all 3MMA lead times have trended downwards since February and remain at some of the shortest levels seen in the past year.

The hot rolled 3MMA is now at 4.82 weeks, cold rolled at 6.69 weeks, galvanized at 7.04 weeks, Galvalume at 7.13 weeks, and plate at 4.15 weeks.

Figure 2 highlights lead time movements across the past four years.

Brett Linton

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