SMU Data and Models

SMU Steel Buyers Sentiment Index Indicates Continued Optimism

Written by John Packard

The Steel Market Update (SMU) Steel Buyers Sentiment Index was reported this week to be +37 which is 2 points lower than our last reading made during the first week of December. Nonetheless, SMU Steel Buyers Sentiment is well within the optimistic range of our index where it has been for 24 consecutive months. Sentiment has been range bound in the upper 30’s since the middle of June 2013.

The 3 month moving average (3MMA) for our Sentiment Index is +37.33 which is the lowest reading since mid-August of this year. One month ago the 3MMA was +37.83.  However, one year ago it was +17.67 which means we have seen Sentiment improve by 19.66 points since December 2012.

John Packard, publisher of Steel Market Update and the creator of the SMU Steel Buyers Sentiment Index had this to say, “We are seeing a continuation of optimism within the flat rolled steel industry as prices remain steady, supply and demand appear to be in balance and the number of positives impacting the market seem to outweigh those who have concerns.”

Future Sentiment +53

SMU Future Steel Buyers Sentiment Index was measured this week and reported to be +53 based on our just concluded SMU steel market analysis. Future Sentiment slipped 4 points from the +57 of two weeks ago but is much higher than the +45 measured during mid-November. This time last year Future Sentiment was reported to be +47.

What Our Respondents Had to Say During the Questionnaire Process

“Business is stronger but pricing is depressed.” Service Center.

“We usually pick up in 1st qtr as our customers gear up for spring.” Manufacturing Company.

“Business has picked up over the last 60-90 days, not sure if this will continue into 2014 or not.” HVAC Wholesaler.

“I can ONLY speak about Plate – conditions improving. Mill lead-times for plate are moving out – prices up – the term “Backlog” is popping up with the plate fabricators which hasn’t been spoken in months. we still have a long way to get back to “fun.”

“We had a fairly firm order book and the recent storms provided significant work. If we were seeing more commercial/industrial activity I would rate it Excellent.” Metal Building Company.

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 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 currently display the index reading on a meter on the Home Page of our website for all to enjoy.

Currently we send invitations to slightly more than 600 North American companies to participate in our survey. Our normal response rate is approximately 125-175 companies. Of those responding to this week’s survey 49 percent were manufacturing companies, 39 percent were service centers/distributors and the balance was made up of steel mills, trading companies, toll processors and suppliers to the industry (such as paint companies).

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.

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