SMU Data and Models

SMU Steel Buyers Sentiment Index Remains at +52

December 4, 2014

SMU Steel Buyers Sentiment Index came in at +52 this week. This is the same reading we got back in the middle of November 2014 The +52, which is within the optimistic range for our index, was 10 points less enthusiastic than what we measured at the beginning of November. One year ago our current index was +39.

The three month moving average (3MMA) continued to slide for the third consecutive month. We have seen our three month moving average decline from +61.83 in September to its current level at +58.83. Even with a sideways move on the current index, the longer term trend for the 3MMA is at this moment looking like it will move lower from here. We won’t know until mid-January if this is just a seasonal move or something we need to be more concerned about.

We did see a small portion of our respondents reporting business conditions as slowing due to the holidays and other normal seasonal factors.

SMU Future Sentiment Index was measured at +61, up 4 points from two weeks ago and up 2 points compared to one month ago. One year ago Future Sentiment was +57.

Even with a slight pullback in Sentiment over the past few months, our survey results are reporting buyers and sellers of flat rolled steel as continuing to be optimistic about their company’s ability to be successful both now as well as three to six months into the future.

About the SMU Steel Buyers Sentiment Index:

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 (can only be seen when logged into the website).

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, 42 percent were manufacturing companies (down 4 percent from our last survey) and 45 percent were service centers/distributors (up 5 percent from our last survey). The balance of the respondents being made up of steel mills, trading companies and toll processors involved in the steel business.

Steel Market Update subscribers and those on a free trial can access an interactive graphic of the Steel Market Update Steel Buyers Sentiment Index History. The interactive graphs and tables can only be seen when you are logged into the website.