SMU Steel Buyers Sentiment Index: Less and Less Optimism

Current Sentiment measured as a single data point registered +42 in the latest data, down 5 points since early May and down 36 points since January last year. Measured as a 3MMA, Current Sentiment averaged 52.17, down nearly 3 points from 55.00 two weeks ago. The Current 3MMA was 19 points higher at the beginning of last year.

Future Sentiment

Respondents were asked to assess their chances for success in three to six months. Measured as a single data point, Future Sentiment registered +43, down 6 points from the +49 reading in the first week of May, and down 34 points from its January 2018 peak. Measured as a 3MMA, the Future Index averaged 55.33, down nearly 4 points from 59.00 in SMU’s early May questionnaire. In January last year the Future 3MMA was 16 points higher.

What Our Respondents Had to Say

“We’re concerned about which direction pricing will go with the lifting of the tariffs.”

“Trade changes continue to make the steel landscape uncertain. Section 232’s removal from Canada and Mexico was not expected this soon. And changes on Turkey’s rate add to the import risk.”

“We are seeing strong orders coming in for our buildings group. We have maintained pricing, but I’m starting to feel pressure from some of our customers to lower prices, given the declining steel prices.”

“The inventory keeps depreciating, customers are not keeping their commitments, contract prices are not moving down as fast as the spot market is moving down. Margins continue to be squeezed as people dump excess inventory, which everyone seems to have.”

“Demand is softening. We’re very concerned about the slowdown in demand from multiple business sectors.”

“I don’t see any clarity in the near future.”

“As an importer, with 232 lifted from Mexico/Canada, we should be able to resume that portion of our supply base.”

“Steel price movement is positive [for an OEM}; additional China tariffs complicate things.”

“We are busy in all parts of our company.”

“We have a strong backlog and see good order activity coming in.

“If prices stop declining, things should get closer to normal.”

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, 38 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.