Recently, Steel Market Update adjusted our Price Momentum Indicator on flat rolled steel pricing from "Rising" to "Neutral". Not all of our members/readers understand what a neutral reading means.

If you can’t stand the heat get out of the kitchen...

SMU received an opinion from a reader in the final comment section of this week’s SMU Market Survey. I will let the comment, which is quoted below in its entirety speak for itself:

“Comment in general, I am very disappointed in SMU's forecast for pricing. When you say "neutral" what the hell does that mean, it could go either way, I can get that kind of direction from my 5 year old granddaughter. Very disappointed!”

The service center who penned the above comment deserves a response. To be honest, w are not big fans of the term “neutral” either. But, it is important to point out the position SMU has chosen to take in the marketplace.

It is our desire to be honest and straightforward with our readers as to how we see the market over within a certain time frame – 30, 60 maybe sometimes 90 days out. Past that we are entering the arena of those with crystal balls (and I will let you figure out which kind) – and we do not pretend to be soothsayers.

At the same point in time as our readership expands it is not our position to try to influence market pricing. The domestic mills, foreign suppliers and service centers need to work out their selling prices without some knucklehead raining on their parade.

So, we try to provide as balanced a viewpoint as possible.

Let’s talk about our move to “Neutral”. It’s our “pansy” way of saying the trend – in this case we were on a Rising or trend for higher prices – will soon break and move in the opposite direction. That is our opinion based on the factors we have presented in the past couple of issues so we will not revisit them again at this time. At the same time we also pointed out a few reasons why we may be a bit premature in our call (and those who have been with us for a few years know we made a similar call at this time of year and it took a few weeks longer to break down than we anticipated). The steel market has a way of sending mixed messages.

A move to Neutral is our way of saying – be warned, be wary – and then makes your own decisions as to what is prudent for your company.

Or, you can ask your 5-year old granddaughter.