Steel Market Update's Sentiment Index keeps rising
Over the past two weeks, SMU Buyers Sentiment Index has risen by 1 point and stands at +2. Going back over the last four weeks our index has improved a total of 19 points. SMU Buyers Sentiment is slightly into “Optimistic” territory for the second time in six months. This is only the sixth time the number has been positive this year, and it is 31 points higher than this time last year.
SMU's opinion is that our SMU Buyers Sentiment Index tends to lead pricing and may well be a harbinger for much higher prices in the weeks to come. We will watch the relationship between our hot rolled price index (shown below) and the SMU Buyers Sentiment Index to see if the cat is wagging the tail of the dog or vice versa.
See chart below
SMU Future Sentiment Keeps Rising
SMU Future Sentiment posted the highest level recorded since we began tracking both current and Future Sentiment on November 3, 2008. Our most recent survey of steel buyers and sellers recorded a +36 for SMU Future Sentiment which measures how active buyers and sellers feel about their company’s prospects for success three to six months out into the future.
SMU Future Sentiment has improved by 25 points over the past month (or since the price increase announcements began on the 1st of November). The last time our SMU Future Sentiment Index was in the 30’s was during the time period between mid April and early June before collapsing to single digits during the summer and not recovering until early November. See chart below.