SMU Steel Buyers Sentiment Improves

The most pessimistic recording captured by our index was in early March 2009 when our index was reported at -85.

SMU Future Sentiment Index which measures how buyers and sellers feel about business conditions and their company’s ability to be successful 3 to 6 months in the future, was measured today at +62 is an improvement of +11 points. The last time our Futures Sentiment Index jumped by 11 points or more was in early-December 2013 when it jumped from +45 to +57 points within a two week time span.

Improving weather, demand and the recent price increase announcements are the main factors which have pushed our index to the highs for the year. Those responding to our queries during the initial survey process reported pent up demand which is expected to be released with the improving weather conditions. From a historical perspective our index tends to see an improvement in optimism – particularly from the service center segment of the flat rolled industry – when prices are perceived to have hit bottom or have a chance to move higher. The domestic steel mills announced price increases on spot flat rolled steels earlier this week.

A service center executive in the Midwest told SMU during the survey process, “Current activity levels are reasonably good but on balance our customers are expecting increased activity in April and May.”

Another service center left this comment, “Seems like buyers believe we are close to the bottom.”

While a manufacturing company told us, “Seasonal construction demand, can’t go anywhere but up….”

A service center associated with the automotive industry stated, “Automotive business remains strong.”

The only somewhat negative comment we received during the process was from a manufacturing company which supplies the “big box” stores like a Lowes or Home Depot. Their comment was, “This Polar Vortex has had a big impact on how the big box companies are stocking their inventory.” They reported demand as improving but in the process also stated, “But remember this demand is weather related. Because the big box companies are over stocking inventory there will be a lull in orders later on.”

About the SMU Steel Buyers Sentiment Indices

SMU Steel Buyers Sentiment Index is a measurement of the current attitude of buyers and sellers of flat rolled steel products in North America regarding how they feel about their company’s opportunity for success in today’s market. It is a proprietary product developed by Steel Market Update for the North American steel industry.

Positive readings will run from + 10  to + 100 and the arrow will point to the right hand side of the meter located on the Home Page of our website indicating a positive or optimistic sentiment.

Negative readings will run from -10 to -100 and the arrow will point to the left hand side of the meter on our website indicating negative or pessimistic sentiment.

A reading of “0” (+/- 10) indicates a neutral sentiment (or slightly optimistic or pessimistic) which is most likely an indicator of a shift occurring in the marketplace.

Readings are developed through Steel Market Update market surveys which are conducted twice per month. We display the index reading on a meter on the Home Page of our website for all to enjoy.

Currently we send invitations to slightly less than 600 North American companies to participate in our survey. Our normal response rate is approximately 120-170 companies. Of those responding to this week’s survey, 44 percent were manufacturing companies (down from 49 percent in our last survey) and 40 percent were service centers/distributors (up from 37 percent in our last survey). The balance of respondents are made up of steel mills, trading companies and toll processors involved in the steel business.

Steel Market Update does canvass those being invited to participate in order to confirm their active participation in the flat rolled steel business. Our list is updated at least once per month and we are adding new companies on a continuous basis.

You can view the interactive graphic below of the Steel Buyers Sentiment Index when you are logged into the website and reading the newsletter online. If you have not logged into the website in the past and need a new user name and password we can do that for you out of our office. Contact us at: info@SteelMarketUpdate.com or by calling 800-432-3475. If you need help navigating the website we would also be very happy to assist you.

{amchart id=”109″ SMU Steel Buyers Sentiment Index- Survey}