Steel Buyers Discuss Late Mill Orders with SMU

In Sunday night’s issue of Steel Market Update, I discussed the increase in the days of inventory on order at the service centers. The increase can be attributed to extended lead times, late deliveries and perhaps some double ordering from the distributors’ end-user customers. We saw an increase in the percentage of inventory that is being held for contracts as spot ton availability at the steel mills continues to be limited or not available at all.

So, we need to watch for changes in lead times. But perhaps the most critical item to watch right now is whether the domestic steel mills are beginning to deliver late orders. It is the rush of late orders that will most likely be the first sign of having reached the “tipping” point. The tipping point being when prices stall and begin to spiral lower.