SMU Survey: Lead times tick higher

The average lead time for hot-rolled coil is approximately five weeks. Cold-rolled and coated products are in the mid-six-week range. Plate is just under five and a half weeks.

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

Compared to our mid-October market check, three of our lead time ranges shifted this week:

• The shortest cold rolled and galvanized lead times considered rose from four weeks to five.
• The shortest plate lead time considered increased from three weeks to four.

Buyers predict stability

Almost two-thirds of buyers (66%) expect stable lead times over the next two months, in line with recent surveys. Of the remainder, 26% foresee lead times extending in the near future, while 8% anticipate contractions.

Here are some of the comments we collected:

“Domestic lead times are one of the biggest reasons we’re so bearish. They are so short already and it is only going to get worse.”

“They can’t get much shorter.”

“Flat, there is plenty of available capacity.”

“Flat, demand will remain soft.”

“I think they are extending in the near term before they flatten out.”

“Contracting, economic indicators are not strong.”

Trends

To highlight broader trends, lead times can be calculated on a three-month moving average (3MMA) basis (Figure 2). Three of our five 3MMAs were unchanged this week compared to mid-October, and two inched a 10th of a week higher (hot rolled and Galvalume).

Overall, sheet 3MMA lead times remain just above the two-year lows seen in early September. The plate 3MMA has trended lower since August but remains about a week longer than it was this time last year.

Average lead times by product across the past three months were: hot rolled at 4.6 weeks, cold rolled at 6.3 weeks, galvanized at 6.2 weeks, Galvalume at 6.5 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.