SMU Steel Buyers Sentiment Index Improves to +38
Steel Market Update (SMU) Steel Buyers Sentiment Index improved by 4 points was measured at +38 during our most recent steel market survey which concluded on Wednesday of this week. This means our Sentiment Index continues within the optimistic range going back to December 2009.
At the beginning of March of the SMU Sentiment Index was +45 just prior to the AK Steel announcement of price increases. Through the balance of March and into early April SMU Steel Buyers Sentiment retreated to the +34 recorded during the first week of April.
SMU believes the recent stability of market pricing has led to a more optimistic attitude of those steel buyers and sellers taking our SMU steel market survey. We found optimism related to current and future demand (see article below) which we believe is helping keep our index well entrenched within the optimistic range. The markets are slowly improving and we believe our Sentiment Index reflects the improvement in demand along with the stability of steel prices at this time.
Our SMU Steel Buyers Sentiment Index which began in November 2008 reached an all-time high at +49 in the middle of January 2012. The lowest reading recorded goes back to March 2009 when we measured Sentiment at -85.
SMU received a mixed reaction from those who left comments during our market survey which concluded on Wednesday of this week. We are finding spotty improvements within the construction industry although most companies associated with construction continue to complain their business is still not back to “normal” levels of 2007 and before.
Even so, we received a couple of comments from construction related companies like this one from a manufacturer who reported, “Our backlog is strong, and we have enough in it today to ensure we meet our budget for 2012.” This same manufacturer reported their business for 2012 would be “…+30% on both the top and bottom line.”
Another manufacturing company reported, “We continue to have success in our key markets and have new opportunities on a regular basis.”
Not all manufacturing companies are optimistic about current market conditions. A manufacturing company associated with the construction industry provided their opinion to SMU during the survey process, “Light gauge construction industry has really been horrible when talking earnings. Sales up -earnings down. How does that look - anything but poor.”
About the SMU Steel Buyers Sentiment Index
SMU 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 growth 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 right hand 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 left hand 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 which are conducted twice per month. We display the index reading on a meter on the Home Page of our website for all to enjoy.
Currently we send invitations to approximately 700 North American companies to participate in our survey. Our normal response rate is approximately 130-200 companies. Of those responding approximately 48% are manufacturing companies, 49% are service centers/distributors and the balance is made up of steel mills, trading companies and toll processors involved in the steel business.
Steel Market Update does canvass those being invited to participate in order to confirm their active participation in the flat rolled steel business. Our list is updated at least once per month and we are adding new companies on a continuous basis.