Steel Buyers Sentiment Rises Again, Nears Six-Month High

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 +82 this week, up from +79 in mid-March. It is now at its highest reading seen since mid-October.

Future Sentiment – which measures buyers’ feelings about their prospects three to six months in the future – increased 5 points to +74.

Recall that in early September when steel prices had peaked, Current Sentiment reached an all-time high of +84 and Future Sentiment was at a near-record +75.

Measured as a three-month moving average, the Current Sentiment 3MMA is at +73.00, and the Future Sentiment 3MMA is at +67.50. This indicates that steel buyers’ attitudes are mostly unchanged despite volatile market conditions.

What SMU Survey Respondents Had to Say

“Demand is strong, pricing is headed higher, inventories are more in line, what is not to like? Also, we still have an auto comeback and infrastructure projects to look forward to. THE BULLS ARE RUNNING AGAIN.”

“Too many changes and too much uncertainty in costs and trade flows.”

“Our customers will have depleted their inventories and will return to normal buying patterns.”

“We are remaining in the ‘every month is a good year’ realm, which is nuts. I don’t expect that to change.”

“Inflation will stymie demand.”

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 30 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