SMU Steel Buyers Sentiment Index: Stable with Some Concerns

Current Steel Buyers Sentiment Index measures how buyers and sellers of flat rolled and plate steel feel about their company’s abiity to be successful in the “current” market environment.

Future Steel Buyers Sentiment Index

Future Sentiment, how buyers and sellers of flat rolled and plate steel view of their company’s ability to be successful three to six months in the future, also increased by 2 points to +63 from early July. The 3MMA for Future Sentiment inched down to 61.50 from 61.83 two weeks prior. The Future Sentiment Index appears to be stabilizing, but at numbers well below this point last year. This is troubling to Steel Market Update as Future Sentiment tradionally has been higher than Current Sentiment, and we are concerned the pessimistic trend may be forecasting trouble for the industry late this year or early into 2019. We will continue to watch developments with our Future Index closely in the weeks and months to come.

To put the figures in perspective, both Current and Future Sentiment reached record highs for a single data point in mid-January with Current Sentiment at +78 and Future Sentiment at +77. Respondents are less optimistic than they were at the beginning of the year, and we have seen Current Sentiment return to levels reported at this time last year. Future Sentiment has not, and we are concerned. Unlike Current Sentiment, our Future Sentiment Index is rising slowly but at levels below year-ago, and it’s still less optimistic than at any time in the last 18 months.

What Respondents are Saying

• “I see stable demand and pricing for the next three months.”
• “Demand is steady, but some signs of slowing are starting to appear. Concern about the downward direction of future price is affecting some future buys. Too much uncertainty on trade will negatively affect our business in the future.”
• “Tariffs are making it difficult.”
• “Good pockets of business are accompanied by uncertainty in a growing number of markets.”
• “Uncertainty is clouding the future.”
• “We are very concerned about my Canadian HR supply.”
• “Things do seem to be slowing some!”
• “The business climate needs a period of sustained stability.”

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 righthand 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 lefthand 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 more than 600 North American companies. Our normal response rate is approximately 110-150 companies. Of those responding to this week’s survey, 40 percent were manufacturers and 45 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.