SMU Data and Models

SMU Steel Buyers Sentiment: 3MMA Slips to 10-Month Low

Written by Brett Linton

March 6, 2022

SMU’s Steel Buyers Sentiment Index continues to inch downward from its late-2021 peak, with the latest three-month moving average sliding to the lowest level seen in nearly 10 months. Although down, sentiment remains at very optimistic levels on the 100-point scale.

Steel Market Update 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 2 points compared to late-February. Future Sentiment – which measures buyers’ feelings about their prospects three to six months in the future – inched up 2 points to +68.

Recall that in early-September when steel prices were at their peak, Current Sentiment reached at an all-time high of +84 and Future Sentiment at a near-record +75. Since then, prices for hot-rolled coil have dropped by nearly 50%. But sentiment has declined much more modestly.

Measured as a three-month moving average, the Current Sentiment 3MMA is at +70.33 and the Future Sentiment 3MMA is at +66.33, showing that steel buyers’ attitudes are mostly unchanged despite volatile market conditions.

What Respondents Had to Say

“Port congestion is terrible, and that is a big factor for my imports. Cargo is delayed up to two months now.”

“We are still seeing results that are off-the-charts.”

“Making good profits, and demand is still consistent.”

“Losing money on every order due to high-cost inventory.”

“We are anticipating a very strong year in our product category directly influenced by the price of oil.”

“Customers are honoring orders unlike other times when the market has dive bombed like this.”

“High costs and inflation will see end-users start to slow down.”

Tracking steel buyers’ sentiment is helpful in predicting their future behavior.

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 35 percent are manufacturers, 50 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 Brett Linton, Brett@SteelMarketUpdate.com 

Brett Linton

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.

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