I usually start with steel prices and lead times. But I’d like to start with demand this time, because, Houston, we have a problem.
About 40% of people responding to the last survey from the Steel Market Update (SMU) reported decreasing demand. That’s the highest reading we’ve seen in our surveys since the outset of the pandemic in spring 2020.
I have been saying for the first six months of this year that stable demand was the sauce that made volatile steel prices palatable. That’s no longer the case. Only 54% report that demand is stable, and only a small minority says it is increasing (see Figure 1).
Also, we’ve done some initial calculations, and it looks like this feedback on demand might actually affect lead times. In other words, lead times are an advanced indicator of price moves, and people’s feelings about demand might be an advanced indicator of lead times.
