SMU Steel Buyers Sentiment Index Jumps to +25
Steel Market Update (SMU) Steel Buyers Sentiment Index jumped +9 points to +25 based on the SMU steel market survey results from earlier this week. The +25 reading is the highest since the first week of June 2011 but is still 15 points below the peak of +40 registered the first week of April 2011.
The SMU Steel Buyers Sentiment Index continues in the optimistic range where it has been for the past 33 weeks. The Index declined from +40 to +13 between early April and the middle of June. Since then the Index has gradually been improving to its current +25 level.
We received a number of comments during the survey process which help guide us as to the reasons why the SMU Steel Buyers Sentiment Index has been improving over the past six weeks. “We are apparently in the minority, as we continue to develop new business and expand into new markets. While we certainly face challenges, sitting back and waiting for the recovery simply isn't our style,” is what we heard from one U.S. manufacturer.
Other comments were brief and to the point as was the case with one garage door manufacturer, “Business seems to be on a upswing. Why? Don't know....”
The question from here is will this renewed optimism translate into a bottoming of the market and an increase in demand – at least enough of an increase to help absorb the new production out of RG Steel, Severstal Columbus and ThyssenKrupp Steel USA?
SMU Future Steel Buyers Sentiment Index at +45
SMU Future Steel Buyers Sentiment Index improved by +6 points to +45 as steel buyers and sellers become more confident in the ability of their company to be successful three to six months out into the future.
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 actually display the index reading on a meter on the Home Page of our website for all to enjoy.
Currently we send invitations to over 775 North American companies to participate in our survey. Our normal response rate is approximately 150-200 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.
You can find our historical data on both the SMU Buyers Sentiment Index and SMU Futures Sentiment index on our website in the research section of the site.