SMU Survey: Lead times remain short

The average lead time for hot-rolled coil is holding at just above four and a half weeks. Cold-rolled and coated products are all in the low-to-mid-six-week range. Plate is just over five weeks.

Table 1 summarizes current lead times and recent changes by product (click to expand)

Compared to our early October market check, one of our lead time ranges shifted this week; the shortest plate lead time considered declined from four weeks to three.

Buyer predictions

Almost two-thirds of buyers (61%) foresee steady lead times over the next two months, similar to recent surveys. Of the remainder, 31% expect lead times to extend in the near future, while 8% anticipate contractions.

Here are some of the comments we collected:

“Flat, I don’t see much changing without the mills artificially forcing the issue.”

“Flat before beginning a period of marginally increasing.”

“They will remain relatively short.”

“Extending on scheduled maintenance/shutdowns in Q4, plus manufacturers increasing inventory in anticipation of Q1 improvements.”

“Extending – I believe as demand picks up, limited imports will stress domestic mills.”

“I think they contract some prior to going back to flat.”

“Contracting – I know there is a lot of talk about an ‘inflection point’ in the marketplace and some coil hikes coming, but I’m not buying it! I still see demand as too weak and supply to become even more abundant again once the fall outages unwind and maybe even a trade deal or two are struck with our neighbors, Mexico and Canada.”

“Contracting, everybody will be trying to get the most out of their steel contracts for next year.”

Trends

To highlight broader trends, lead times can be calculated on a three-month moving average (3MMA) basis (Figure 2). Four of our five 3MMAs were unchanged this week compared to early October. Plate was the exception, edging slightly lower. Overall, sheet 3MMA lead times are holding just above the historic lows seen in early-September (when most products shrank to their lowest levels in over two years). The plate 3MMA has gradually declined since August but remains about a week higher than it was this time last year.

Average lead times by product across the past three months were: hot rolled at 4.5 weeks, cold rolled at 6.3 weeks, galvanized at 6.2 weeks, Galvalume at 6.4 weeks, and plate at 5.2 weeks.

Note: These lead times are based on the average from manufacturers and steel service centers participating in this week’s SMU market trends analysis survey. SMU measures lead times as the time it takes from when an order is placed with the mill to when it 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. Consult your mill rep for actual lead times. To see an interactive history of our steel mill lead times data, visit our website. If you’d like to participate in our survey, contact us at info@steelmarketupdate.com.