SMU Data and Models
SMU Steel Buyers Sentiment: Matches All-Time High
Written by Tim Triplett
July 23, 2021
Steel Market Update’s survey of steel buyers this week shows no signs of anxiety about a possible price correction in the coming months. Like steel prices, buyers’ attitudes have never been loftier. SMU’s Steel Buyers Sentiment Index moved up four points to tie its all-time high of +79 as steel prices continued to rise and mills and service centers reported record second-quarter earnings. SMU’s Future Sentiment Index was nearly as optimistic, up two points to +70.
SMU asks steel buyers every two weeks how they view their company’s chances for success in the current environment and how they view their prospects three to six months in the future. The current reading ties the +79 seen last month and bests the prior record of +78 reached in January 2018. The previous high for Future Sentiment was +77 in February 2018.
Measured as a three-month moving average (3MMA) to smooth out the variability, Current Sentiment stood at +75.83 this week, up slightly from +74.83 two weeks ago. The Future Sentiment 3MMA was at +66.00, up from +65.17 in the last survey.
SMU keeps a close eye on buyer sentiment for early indications of a change in the market. When buyers become less bullish, that suggests they are feeling less positive about various market conditions. A few expressed concerns this week about inflation, for example (see comments below). But for the vast majority, business has never been better.
What Respondents Had to Say
“I think the market is going to slow dramatically due to inflation. It’s real, not transitory.”
“Inflation is a real concern for demand. Not enough attention is being paid to it as the mills live for today – fat, dumb and happy.”
“Worried about the fall.”
“Demand is there, and our supply is good enough; we’ll have an excellent 2H of 2021.”
“Unbelievably fun, unbelievably profitable. … Let’s all enjoy this historic run.”
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 run from +10 to +100. A positive reading means the meter on the right-hand side of our home page will fall in the green area indicating optimistic sentiment. Negative readings run from -10 to -100. They result in the meter on our homepage trending into the red, indicating 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. Sentiment is measured via Steel Market Update surveys that are conducted twice per month. We display the meter on our home page for all to see.
We currently send invitations to participate in our survey to more than 600 North American companies. Our normal response rate is 100-150 companies. Approximately 40 percent are manufacturers, 45 percent are service centers/distributors, and 15 percent are steel mills, trading companies or 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.
By Tim Triplett, Tim@SteelMarketUpdate.com
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
SMU Survey: Mill lead times remain stable and short
Steel buyers participating in our market survey this week reported stable mill lead times for both sheet and plate steel products.
SMU Survey: Most buyers report mills still willing to talk price
Most steel buyers SMU polled this week reported that mills remain willing to negotiate new order pricing.
October service center shipments and inventories report
Flat rolled = 63.4 shipping days of supply Plate = 52.4 shipping days of supply Flat rolled shipments and inventories Flat-rolled steel supply at US service centers remains seasonally high. October inventories increased after edging lower in September – a dynamic driven largely by disappointing demand. October’s report reflects lower demand and stable lead times […]
Apparent steel supply slips to 7-month low in September
The total amount of finished steel to enter the US market in September fell to its lowest level in seven months, according to our analysis of recent Department of Commerce and the American Iron and Steel Institute (AISI) data
SMU market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Past survey results are also available under that selection. If you need help accessing the survey results, or if […]