Despite Falling Steel Prices, SMU Steel Buyers Sentiment Index Remains Optimistic

Looking at Sentiment based on a three month moving average (3MMA) which helps us smooth out some of the bumps and bruises we see from survey to survey, current Sentiment is +51.83 down slightly from the +52.33 we saw two weeks ago and the +52.83 during the middle of February. One year ago the 3MMA for Sentiment was +41.

We found mixed emotions regarding the impact the most recent drop in steel prices is having on the well being of those operating within the flat rolled steel industry. We found during the survey process conducted throughout this week that some companies do well in a falling market while others are hurt as their inventories devalue and margins are squeezed.

Here are some of the comments collected during this week’s survey:
    
“Tons moving well but margins in the tank. [It is] just a question of how much older inventory you want to move at a loss…” Service Center

“Our company typically does much better when the market is falling. Cheaper prices and more availability of product.” Service Center

“Prices keep falling, devaluing our inventory. Spot prices are ridiculous.” Service Center

”Inventory is upside down and continues to get worse at the market continues to drop.” Manufacturing Company

“As the weather improves so will our business. The birds are starting to sing.” Manufacturing Company

Below are two interactive graphics, one of the Steel Market Update Buyers Sentiment Index History and the other of the Future Buyers Sentiment Index History. They 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}

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

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, 49 percent were manufacturing and 37 percent were service centers/distributors. The balance of the respondents are made up of steel mills, trading companies and toll processors involved in the steel business.