Steel Mill Lead Times: Watching Changes Closely

Sunday, March 19, 2017 8:38 PM Written by 
Published in SMU Mill Lead Times

Steel mill lead times are one of the key indicators of future direction of steel prices. Steel buyers must be aware of the amount of time it takes a supplier to produce and ship a new order. Lead times and balancing inventories go hand in hand. When lead times shrink, buyers can pull back on ordering steel. However, when lead times move out (extend) steel buyers have to increase purchases to make sure their company does not run out of product.

There are two ways to look at mill lead times. A buyer’s primary focus is on the suppliers being used or considered. They would review the lead times sheets (or verbal promises made by their salesperson) sent to them by their suppliers. The second way is to review the industry average which is produced by Steel Market Update during our flat rolled steel market trends analysis which is produced twice per month.

We last finished a market trends analysis on the 10th of March. At that time, we saw hot rolled averaging 4.38 weeks, cold rolled 6.53 weeks, galvanized 6.86 weeks and Galvalume 6.93 weeks. As we look at the graph produced at that time we found lead times as being the same or slightly lower than year ago levels. One year ago lead times were surging and prices were on the move (albeit from very low levels) before peaking during the first week of June at $635 per ton (last week SMU average on HRC was $645 per ton).



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John Packard

John Packard is the President and Publisher of Steel Market Update. Since 1977, he has been an active participant in the flat rolled steel business in North America. His background provides the unique flavor and quality of Steel Market Update. John has held positions in the service center, steel mill and trading company segments of the flat rolled steel industry. John founded Steel Market Update, Inc. in August 2008. John can be reached via email at: John@SteelMarketUpdate.com or by phone: 800-432-3475.

Website: www.SteelMarketUpdate.com
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