SMU Survey: Mill lead times tick lower - Steel Market Update

Oct 25, 2024

SMU Data and Models

Written by Brett Linton

October 24, 2024

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Mill lead times for both sheet and plate products pulled back further this week, according to steel buyers responding to our latest market survey,

Sheet lead times have eased across the board compared to levels reported one month ago, returning to lows last seen in July. On average, lead times for hot-rolled steel are around four-and-a-half weeks, while tandem products are all hovering around six to seven weeks. Plate lead times continue to fluctuate near the four-week mark, territory they have been in since July. Overall, lead times remain near some of the shortest levels witnessed this year.

Table 1 below summarizes current lead times and recent trends.

Compared to our Oct. 9 market check, the upper and lower limits for some of our lead-time ranges this week have changed:

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

Over half of the companies we surveyed this week believe lead times will be flat two months from now. This rate is in line with our prior survey but down compared to prior months. Nearly a third forecast production times to extend further, also in line with early-October responses. However, this is up slightly from August and September results. The small remainder believe lead times will shrink further, similar to inputs received over the past two months.

We also asked buyers how they classify current mill production times. Most continue to respond that they are either shorter than normal (48%) or within typical levels (40%). A small portion of buyers said lead times are slightly longer than normal (12%).

“[Lead times will contract as] there is way too much capacity domestically (especially after the fall outages wrap up), not to mention Mexico. Imports are still lurking, too.”

“Flat demand combined with compromised supply will help hold the line, at least somewhat.”

“Demand spike needed to extend lead times will not happen until CY25.”

“[Lead times will extend as] year-end inventory reductions will be behind us and people will be placing orders.”

“Our crystal ball is a little cloudy, but once we move past the election, we expect there to be an increase in business, which may impact mill lead times.”

“Lead times will contract through November and then begin to recover.”

“They will extend beginning when customers start placing more 2025 orders, so extend in about 4-6 weeks.”

“Hopefully extending in the new year.”

To smooth out the variability seen in our biweekly readings and better highlight trends, we present lead time data on a three-month moving average (3MMA) basis in Figure 2.

Through Oct. 23, 3MMA lead times were steady to down for both sheet and plate products. Overall, 3MMA lead times have trended downwards since February and remain near one-year lows. Sheet 3MMA lead times have begun to level out in recent months, while plate 3MMA lead times continue to slide lower.

The hot rolled 3MMA is now at 4.81 weeks, cold rolled at 6.67 weeks, galvanized at 7.04 weeks, Galvalume at 7.14 weeks, and plate at 4.07 weeks.

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at [email protected] or 724-314-0179.

More than nine out of every 10 steel buyers polled by SMU this week reported that mills are flexible on prices for new orders. Negotiation rates have been strong since April and on the rise since early September.

Steelmaking raw material prices strengthened for all but one product in October, a change in pace compared to recent months, according to SMU’s latest analysis.

The volume of finished steel entering the US market declined in August from July, according to SMU’s analysis of data from the US Department of Commerce and the American Iron and Steel Institute (AISI). Referred to as ‘apparent steel supply,’ we calculate this monthly rate by combining domestic steel mill shipments and finished US steel imports and deducting total US steel exports.

Flat rolled = 60.8 shipping days of supply Plate = 52.7 shipping days of supply Flat rolled Flat-rolled steel supply at US service centers declined in September, though still seasonally high. September’s report reflects lower demand, stable lead times, and restocking early in the third quarter at a perceived bottom in prices. At the end […]