SMU Steel Buyers Sentiment Index: New Year Optimism

As a single data point, the Current Sentiment reading of +61 is up 11 points from two weeks ago, and 35 points higher than in early October when the index hit its lowest point since June 2013. Measured as a 3MMA, Current Sentiment is at +46.17, an improvement from the recent four-year low of +38.50, but still below the +59.67 3MMA at this time a year ago.

Future Sentiment

Future Sentiment as a single data point registered +64 in the latest data, up 15 points in the past two weeks. The Future Sentiment 3MMA is +50.67, showing a significant improvement from the six-year low of 42.00 reached in mid-October. At this time last year, the Future Sentiment 3MMA was +58.83.

All the current readings are above zero and on the optimistic half of SMU’s scale, therefore more positive than negative.

Steel buyers sentiment has been trending downhill since 2017, as shown by the chart below tracking the annual rate of change in the three-month moving averages. However, the chart shows the modest upturn in recent months.

What Respondents Had to Say

“Consumption seems steady.”

“Being in the metal building and metal roofing industry, our business activity is subject to the weather. Weather conditions aside, we feel very bullish on the construction market, especially in the southern U.S.”

“We actually ended the last few weeks of the year with strong orders for farm/agriculture products. They have continued into the New Year, which is a great sign.”

“We feel there is pent-up demand for our products and think the first half of 2020 will be much stronger than 2019, but a little shy of 2018 levels.”

“Prices are rising at rapid rate again.”

“Demand has yet to show any weakness coming off of a great 2019.”

“Customers and competitors are loaded with inventory.”

“Trade tensions keep mounting. World stability is questionable these days.”

“We see huge headwinds in the short term as international issues and future election will pull investment in as companies will try to mitigate risks.”

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 500 North American companies. Our normal response rate is approximately 110-150 companies. Of those responding to this week’s survey, 39 percent were manufacturers and 42 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.