SMU Data and Models

SMU Steel Buyers Sentiment Index Rebounds

December 18, 2014

Steel Market Update (SMU) released their Steel Buyers Sentiment Index this afternoon. Sentiment, which is a measure as to how buyers and sellers of flat rolled steel feel about their company’s ability to be successful in the current market environment, rose 4 points from the beginning of December and is now at +56. Positive (+) readings are considered optimistic with the most optimistic reading being +100.

Even with seasonal issues and holidays impacting the current market environment we are finding those responding to our flat rolled market surveys as being upbeat about the industry. We are much more optimistic this year than last when the SMU Steel Buyers Sentiment Index was reported to be +37.

Our 3 month moving average (3MMA) was lower registering +57.50. This is lower than the +58.83 recorded at the beginning of the month and also lower than the +59.0 reported during the middle of November. We are watching our 3MMA closely to see if it is a harbinger for a slight slowdown that has been forecast by economists such as Alan Beaulieu of the Institute for Trend Research.

However, when looking at demand, the respondents in this week’s flat rolled steel survey saw 25 percent reporting demand for their products as improving. Another 63 percent referenced demand for their products as remaining the same and 12 percent saw demand as in decline.

Below is an interactive graphic of the Steel Market Update Steel Buyers Sentiment Index History, but it can only be seen when you are logged into the website and reading the newsletter online. If you need any assistance logging in or navigating the website, contact us at info@SteelMarketUpdate.com or 800-432-3475.

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

Future Sentiment +58

SMU Steel Buyers Future Sentiment Index was reported to be +58, down 3 points from two weeks ago and 1 point higher than one month ago. Last year at this time Future Sentiment was measured as being +53. All of these numbers are well within the optimistic segment of our index.

Below is another interactive graphic, but of our Steel Buyers Future Sentiment Index history.

{amchart id=”108″ SMU Steel Buyers Future Sentiment Index- Survey}

What Respondents Are Saying:

During the survey process we had a number of respondents leave behind comments further explaining the reasons behind their specific responses regarding Sentiment:

“The volume of bids in our market has decreased and is not getting better.” Manufacturing company.

“Plate business looking positive.” Service Center.

“December is a bit slower than anticipated. We are somewhat concerned that the weakness in the world economy could impact the USA at some point.” Service Center.

“A few markets hot enough to make up for the other markets being soft. So a mixed bag, but overall it’s Excellent.” Manufacturing company.

“Our business is somewhat seasonal, and right now we are running on all 8. Come first quarter, we will only need 6.” Manufacturing company.

“$60 oil will have a significant impact on us at some point.” Manufacturing company.

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.

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, 46 percent were manufacturing companies (up 6 percent from our last survey) and 40 percent were service centers/distributors (up 1 percent from our last survey). The balance of the respondents are made up of steel mills, trading companies and toll processors involved in the steel business.