SMU Data and Models

SMU Steel Buyers Sentiment Index Slips Again

Written by John Packard

After setting a record optimistic high of +68 at the beginning of August 2014, SMU Steel Buyers Sentiment Index has now declined for the second time and stands at +53. The most recent measurement is still well within the optimistic parameters for our index. Even so, we are concerned with the 15 point dip that we have seen over the past 30 days.

Our three month moving average (3MMA) is +60.67 which is down slightly from the 60.83 measured two weeks ago and +61.33 one month ago when it was also at an all time high. One year ago the 3MMA was 38.17.

So, what is causing the erosion in confidence we have spotted in the mid-August and now in our early September flat rolled steel market survey?

We got some indication with a few of the comments left behind during the survey process. One manufacturing company reported that, “Our industry is still slow in available quote requests.”  While a second manufacturing company reported that their business was, “Starting to flatten out.”

We only had three companies respond that business was “excellent.” The majority of respondents feel business was good (52 percent) or just fair (43 percent).

Below is an interactive graph of our Sentiment Index (open white space if you are not on our website). In order to see and manipulate the graph you will need to be logged in on the SMU website. Contact us at or 800-432-3475 if you need assistance.

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

At our Steel Summit Conference conducted earlier this week (September 3 & 4) we took a straw poll to see how many of the approximately 200 people in the audience felt business was excellent and we had a less than a dozen hands in the air. The majority of the audience felt business was better than a year ago and another large group felt business was “OK” but with room for improvement.

Later in the program, John Cross of the American Institute of Steel Construction pointed out in his presentation that residential construction and commercial construction were a long way from being back to their pre-recession levels. With construction accounting for approximately 40 percent of the steel being used (both long and flat products) there is still a hole which needs to be filled before complete optimism returns to that segment of the steel industry.

SMU Future Buyers Sentiment Index was measured at +65 this week, down 2 points from mid-August and four points from the beginning of August. Last year at this time Future Sentiment was measured at +45. Below is another interactive graphic, but on our Future Steel Buyers Sentiment Index.

{amchart id=”108″ SMU Steel Buyers Future Sentiment Index- Survey}

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

Currently, we send invitations to participate in our survey to almost 600 North American companies. Our normal response rate is approximately 110-170 companies. Of those responding to this week’s survey, 46 percent were manufacturing companies (up 1 percent from the 45 percent reported in our last survey) and 39 percent were service centers/distributors (down 3 percent from the 42 percent reported in our last survey). The remainder of those responding to this week’s survey were made up of steel mills, trading companies and toll processors involved in the steel business.

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