SMU Steel Buyers Sentiment Index Continues to Improve

Our latest “Current” Sentiment Index is being reported as being +59, which is the most optimistic we have seen for a single data point since the middle of June 2015. Current Sentiment relates to how buyers and sellers of flat rolled steel feel about their company’s ability to be successful in today’s market conditions (we provide an exclamation of what the data points mean at the end of this article. You can find more details and all of our graphics under the Analysis tab when logged into our website).

We prefer to look at the data based on a three month moving average (3MMA) as a way of eliminating any one time glitches we might see during a single collection period. The 3MMA for Current Sentiment rose 3.87 points since the middle of January and 7.83 points since the beginning of January and is now being reported at +45.50.

Future Sentiment Breaks Through to +70

Steel Market Update also collects data regarding how buyers and sellers of flat rolled steel feel about their company’s ability to be successful three to six months into the future. Future Sentiment is being reported at +70 which is the most optimistic we have seen since the middle of July 2014 when we collected a +74 reading.

Future Sentiment 3MMA rose 3.33 points to +56.33 this week which is the most optimistic we have seen on our 3MMA since the middle of September (although at that point we were already on a downward or less optimistic trend). Our Future Sentiment 3MMA has been trending higher ever since the beginning of January and we are now +10 points higher than when we bottomed out during the middle of December 2015.

What Our Respondents are Saying

“If the mills can keep the lead times pumped and enforce their last two increases, 1st Q will be good for all.” Manufacturing company

“Two weeks ago demand was strong due to inventories being down going into the new year. Today things are smoothing out somewhat.” Service center

“Value added products are improving.” Service center

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 100-170 companies. Of those responding to this week’s survey, 45 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.

Click here to view an interactive graphic of the SMU Steel Buyers Sentiment Index or the SMU Future Steel Buyers Sentiment Index.