SMU Steel Buyers Sentiment Index Starts Year on a High Note

Measured as a single data point, the average among those responding to this week’s questionnaire was +73, down from +76 two weeks ago but still at the highest level since last spring.

SMU’s preference is to look at the data based on a three-month moving average (3MMA), which smooths out the index and provides a truer picture of the trend. The Current Sentiment 3MMA is at +68.50, up from +65.50 two weeks ago and at its highest level since early July.

Future Steel Buyers Sentiment Index

SMU asked respondents how they feel about their company’s ability to be successful three to six months in the future. Future Sentiment indexed as a single data point dipped slightly to +73 from +74 two weeks ago, but remains at or near the highest level of the past year.

As a three-month moving average, Future Sentiment registered +68.83, up from +66.67 in mid-December—a two-point swing that signals some late-year optimism.

What Respondents are Saying

• “If steel prices rise as expected, it should help us to profitably get out of some bad inventory positions.”
• “Imports are finally down. Overall, the economy is growing. Section 232 is in the air again. We have the right products and right service. Demand is good.”
• “I think a more robust economy will spur slightly greater demand and that trade policy will keep some metals tight. Our company does well in this type of environment.”
• “When you have a large number of customers tied to CRU agreements in a rising steel market, you are always better off.”
• “I see demand steady and potentially continuing to grow if infrastructure/construction is expanded. But I fear that the uncertainty of trade laws and the potential restriction of free and fair trade will drive up costs and hurt longer-term growth. The economy is overheating and is going to correct itself in 2018.”

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 that are conducted twice per month. We display the index reading on a meter on the Home Page of our website for all to see. Currently, we send invitations to participate in our survey to almost 600 North American companies. Our normal response rate is approximately 110-150 companies. Of those responding to this week’s survey, 47 percent were manufacturers and 40 percent were service centers/distributors. The balance was 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.