SMU Steel Buyers Sentiment Index Sets New Record High

Steel prices have been relatively stable over the past month with benchmark hot rolled pricing having eroded by $15 per ton since the end of May. Many believe hot rolled is poised to move higher from here even though our SMU Steel Index on HRC was the same ($660 per ton) for the third week in a row.

Steel Market Update opinion is the boost in our Sentiment Index is related to an improving demand situation, especially in the commercial construction segment of the market. Our flat rolled steel analysis found those responding that they were seeing improving demand for their products at 40 percent. However, even though this is an optimistic report we are down 12 points from the peak achieved at the beginning of May.

Those responding to our survey echoed a cautionary tale with the comments left behind:

“YTD June usage is flat with prior year, which puts us behind forecast. all due to bad winter which lingered into mid April. While things appear “busy” we are just in fact catching up. Mills should not mistake this for ‘improved demand’”. Manufacturing Company.

“Mostly improving but some accounts are a little slow.” Service Center.

“The general USA economy is going in the right direction question becomes can it maintain?” Service Center.

“Our overall business remains fairly flat over last year but our steel business over the last two month has dropped off considerably. Price continues to be a problem as the market price does not reflect what is going on at the mill level.” Wholesaler.

Future Sentiment

Future Sentiment – looking out 3-6 months, was measured at +66 which is the highest reading since mid-April 2014 when Future Sentiment was reported as being +72. The +66 is +2 from one month ago and up +13 from early July 2013.

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 participate in our survey to almost 600 North American companies. Our normal response rate is approximately 110-170 companies. Of those responding to this week’s survey, 41 percent were manufacturing companies (down 4 percent from the 45 percent reported in our last survey) and 45 percent were service centers/distributors (up 3 percent from the 42 percent reported in our last survey). The balance of the respondents are made up of steel mills, trading companies and toll processors involved in the steel business.

Below is an interactive graph of our Sentiment Index (open white space if you are not on our website). In order to see and manipulate the graph you will need to be logged into the SMU website. Contact us at: info@SteelMarketUpdate.com or by phone at 800-432-3475 if you need assistance.

In the “white” space below is an interactive graphic of SMU Steel Buyers Sentiment Index from a historical perspective. You will need to read this article/newsletter on our website in order to access the graphics as they are stored on our servers. If you need help logging in please contact Brett in our office: 800-432-3475 or info@SteelMarketUpdate.com.

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