Industry Outlook and Factors Affecting Steel Lead Times
Although they are loosening their grip on the industry, supply chain issues may continue to impact steel lead times throughout 2023. High inflation rates results in reduced spending overall, which can further negatively impact supply chains and distribution. There are signs that the economy will gain more momentum, and structural steel prices will continue to increase. However, some lead times have shortened slightly, and the industry’s prognosis is overall positive for the upcoming year.
In its Short Range Outlook for 2022 and 2023, the World Steel Association forecasted a 2.3% decline in steel demand last year, while this year should recover 1%. The report reflects repercussions of high inflation, rising global interest rates, monetary tightening, and China’s economic and steel slowdown of 2022, but the World Steel Association expects steel demand to increase slightly through 2023.
The American Iron and Steel Institute reports that while total steel imports were still down 14.4% compared to January 2022, the United States imported 18.3% more steel in January of 2023 than it did in December 2022. Despite the increase, the US continues to experience an overall ferrous metal shortage. Similarly, January 2023 saw the US ship more than 7.1 million net tons of steel for a 3.6% increase over the previous month but a 7.9% decrease over the same month one year prior. AISI’s steel production industry data is updated regularly. The week ending March 11, 2023, saw roughly a 1% increase over the previous week but still experienced a slight decrease compared to the same period last year.
These factors contribute to shortening lead times for some steel products while others remain at historically higher levels. As of March 7, 2023, Platts’ industry report noted an average lead time for hot rolled coil steel of 7.8 weeks—the longest since September 2001. Other products seeing higher lead times across the industry include:
- Hot dip galvanized steel (8.1 weeks)
- Cold rolled coil steel (7.7 weeks)
- Steel plates (7.2 weeks)
Drawn over mandrel (DOM), hot-rolled, and cold-drawn steel tubing lead times have shortened slightly to anywhere from 10 to 25 weeks; however, structural tubing lead times have dropped to just two to four weeks.
The US recession remains one of the largest factors affecting the steel industry. As demand slowly grows along with burgeoning automobile, construction, and renewable energy industries, price forecasts should respond positively as overall supply chain issues improve.
Westfield Steel Maintains Lower Lead Times
Founded in 1977, Westfield Steel has survived and thrived through all levels of economic health, industry changes, and supply chain disruptions. Our organization’s passion, philosophies, and workflows have positioned Westfield Steel to consistently beat the industry’s average lead times and overcome supply chain and distribution challenges. A few essential factors leading to our competitive lead times include:
- Stock Supply & Robust Inventory
Westfield Steel maintains a massive inventory of steel products, with stock in various sizes and lengths across hot rolled, galvanized, stainless, and much more. One call to Westfield Steel will save you time and money when you need steel. - Continuous Workflows Across Three Service Centers
Having locations strategically placed across our service area reduces lead times. With 24-hour production running across three shifts at three regional distribution centers, you can depend on Westfield Steel to answer your just-in-time needs. - Our Own Delivery Services
Westfield Steel Express is a wholly-owned subsidiary of Westfield Steel and is an authorized-for-hire carrier dedicated to dependable, on-time delivery. Westfield Steel Express is uniquely positioned to service Westfield Steel partners throughout the Midwest and beyond with a fleet of 24 flatbed trailers, 18 over-the-road tractors, and three class 7 trucks.
Are you frustrated or disappointed in your current steel supplier’s lead times? Contact our steel experts today to discuss your supply needs or challenges and discover how Westfield Steel can help lighten your lead times.
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