Steel Products
SMU Steel Buyers Sentiment: Slightly Less Optimistic
Written by Tim Triplett
February 7, 2022
Steel Buyers Sentiment, as measured by Steel Market Update, has inched downward since the beginning of the year and may finally be reflecting the market’s concerns about sharply declining steel prices. While sentiment readings in the 60s are the lowest they have been since last spring, they remain at very optimistic levels on the 100-point scale.
SMU surveys buyers every two weeks and asks how they view their chances of success in the near and longer term. SMU’s Current Sentiment Index registered +68 this week, down 3 points over the past two weeks. The last time Current Sentiment had a reading in the 60s was in April 2021. Future Sentiment – which measures buyers’ feelings about their prospects three to six months in the future – stayed steady at +64. The slight downtrend in sentiment also can be seen in the three-month moving averages in the charts below.
The benchmark price for hot rolled steel has dropped by 37% since its peak last fall to an average of $1,235 per ton – and by all indications will continue to decline until supply and demand find some sort of equilibrium. Yet 69% of the buyers responding to SMU’s questionnaire this week said they remain optimistic about their prospects for the first half of the year. “I’m still feeling pretty darn good, thanks to our contracts and elevated spot numbers,” said one service center executive on the West Coast. “There’s pent-up demand just waiting for the pricing to bottom,” added a tubulars supplier.
{loadposition reserved_message}
Other comments reflect some growing pessimism in the market. “The price correction will hurt everyone, lowering profits across the board,” said one trader. “We’re losing money with high-cost inventory. Until prices stabilize, we are constantly chasing our tail,” added another service center exec.
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.
We 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 Steel Products
Nucor keeps HRC price unchanged
Nucor paused its weekly hot-rolled (HR) coil price this week, keeping it flat for the first time since Jan. 21. This comes after a nine-week rally that saw the company increase prices by double-digits for eight of those weeks.
Nucor increases plate prices by $40/ton
Nucor aims to increase prices for steel plate by $40 per short ton (st) with the opening of its May order book. The Charlotte, N.C.-based steelmaker said the increase was effective with new orders received on Friday, March 28, in a letter to customers dated the same day. The company said the price hike applied […]
US CRC price gains ground over imports
US cold-rolled (CR) coil prices increased again this week, while offshore prices declined.
SMU Steel Demand Index momentum slows
Steel Market Update is pleased to share this Premium content with Executive members. Contact info@steelmarketupdate.com for information on how to upgrade to a Premium-level subscription. Growth in SMU’s Steel Demand Index eased in March after reaching a four-year high in late February. Despite a moderate gain, the index remains in expansion territory. The Steel Demand […]
Leibowitz: Impact of tariffs on US manufacturers
On February 10, President Trump announced a massive restructuring of tariffs on steel and aluminum. Those changes took effect on March 12, and they will impact US manufacturing. What will the impact be? Bye-bye exclusions Perhaps the most important change, which hits imports from all countries, is the loss of a product exclusion process to […]