SMU Survey: Modest drop in sheet lead times as plate ticks higher

The average production time for hot-rolled coil is just under six weeks. Cold rolled and coated products are in the seven-week range. Plate is just over six weeks.

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

Compared to our previous market check, all of our sheet lead-time ranges shifted in some form or fashion this week.

• The longest hot rolled lead time considered declined from eight weeks to seven.
• The longest cold rolled lead time considered decreased from ten weeks to nine.
• The shortest galvanized lead time considered declined from six weeks to five, and the longest lead time considered declined from ten weeks to nine.
• The shortest Galvalume lead time considered decreased from seven weeks to six, and the longest lead time considered declined from ten weeks to nine.

Buyers expect stability

The majority of buyers (68%) believe lead times will remain flat two months from now, slightly higher than our previous survey (60%). Of the remainder, 19% expect lead times will contract from here (up from 11% in mid-January) and just 13% foresee further extensions (down from 29%).

Here are some of the comments we collected:

“Flat, tariffs continue to put domestic sourcing in the driver’s seat. It’s not about demand, it’s about opportunity.”

“Flat, not enough demand or planned outages to support extending lead times.”

“Flat, capacity utilization is still in the mid-70s%. Room to grow.”

“I think we are at a peak now and should see some relief as contract prices catch spot prices.”

“We anticipate imports to be a factor in two months, so we think lead times will be contracting as a result. Just not enough true demand.”

“Two months from now, inventories will have recovered from their relatively low levels and lead times will start to drop.”

“I believe we will start to see the normal cyclical slowdown in early April.”

“Contracting, service centers will lean-out inventories before committing to excessive stock.”

“Slightly longer unless demand significantly improves. First half of April is normally the strongest moment of the year.”

“Extending, there may be a better broad understanding of the demand picture, which could drive more business from users on the sidelines.”

Trends

Lead times can be calculated on a three-month moving average (3MMA) basis to highlight broader trends (Figure 2). Each of our sheet and plate 3MMAs increased yet again this week, a trend seen since November. Sheet 3MMA lead times remain roughly a week longer than the two-year lows we saw last September. The plate 3MMA is about a week and a half longer than year-ago levels.

Average lead times by product across the past three months were: hot rolled at 5.5 weeks, cold rolled at 7.0 weeks, galvanized at 6.9 weeks, Galvalume at 7.2 weeks, and plate at 5.5 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. Premium members can view an interactive history of our steel mill lead times data on our website. If you’d like to participate in our surveys, contact smu@crugroup.com.