SMU Data and Models

SMU Steel Buyers Sentiment Index Trending Higher

Written by John Packard

Steel Market Update (SMU) released ourr latest Steel Buyers Sentiment Index which measures how buyers and sellers of flat rolled steel feel about their company’s ability to be successful in the current business environment. The mid-January Sentiment Index was measured over the period January 20 through February 23, 2014 and is being reported at +44.

Sentiment improved by 1 point compared to the reading produced at the beginning of January and is much more optimistic than the +27 reported during the middle of January 2013. In fact, the +44 is the most optimistic reading collected by Steel Market Update since the +45 produced during the first week of March 2012.

The highest reading for our Sentiment Index was measured at +49 during the middle of January 2012.

Looking at Sentiment on a 3 month moving average basis we are seeing Sentiment trending higher over the past three surveys. Since mid-December the 3MMA has risen from +37.33 to  +39.33. One year ago the 3MMA was +18.83.

It is our opinion that Sentiment is being positively impacted by improvements in demand and stable domestic steel prices at the high level of the range (no depreciation in inventory values) both at the steel mill and distribution levels.

“We have seen a nice pickup in orders,” is a comment left behind by a service center taking our survey.

A wholesaler in the Upper Midwest told us, “We continue to see a slight improvement in market conditions.”

Weather was on the minds of a couple of companies taking our survey. However, even the cold and snow do not appear to be dampening their spirits as demonstrated by one manufacturing company who said, “Once the weather improves, we expect the start of a good year.” A second manufacturing company reported, “weather is impacting steel deliveries and outbound shipments.” Even so they considered the market “good.”

Plate suppliers reported demand as improving. One plate respondent told SMU during the survey process, “Plate is heating up.”

Not everyone is happy with the market as one distributor told SMU, “profits continue to be squeezed.”

Below is one of our interactive graphics which allows our readers to manipulate the data and length of the time series, etc. You will need to be logged into the website in order to see and work with the graphics. If you need assistance in logging into the website please contact our office: or by phone: 800-432-3475. In the same section is the Future Steel Buyers Sentiment Index graphics which are also interactive and available to our members.

{amchart id=”109″ SMU Steel Buyers Sentiment Index}

Future Sentiment Index at +53

Buyers and sellers continue to be optimistic about their company’s ability to be successful out into the future as well. Our Future Sentiment Index was measured at +53 which is at the higher end of the optimistic range even if down 2 points from the +55 reported during the first week of January. One year ago Future Sentiment was +42.

About the SMU Steel Buyers Sentiment Indices

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

Currently we send invitations to approximately 600 North American companies to participate in our survey. Our normal response rate is approximately 120-170 companies. Of those responding to this week’s survey, 49 percent were manufacturing companies (up from the 42 percent participation rate in our last survey), 42 percent were service centers/distributors (45 percent in early January analysis) and the balance was 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.




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