SMU Data and Models

SMU Steel Buyers Sentiment Index: Optimism Rules

Written by John Packard

Buyers and sellers of flat rolled steel continue to be optimistic regarding their company’s ability to be successful in the current market environment as well as out three to six months into the future.

Steel Market Update reported their Sentiment Index as +64 on Thursday, October 9th. The + 64 reading is unchanged from their mid-September report and is +11 points more optimistic than what was recorded at the beginning of September 2014. One year ago Sentiment was +37.

SMU Steel Buyers Sentiment Index is considered within the optimistic range when registering positive numbers (+) above zero. The most optimistic reading possible is +100. The Index is considered pessimistic when numbers show negative values (-) with the most pessimistic reading possible being -100.

Below is an interactive graphic of the SMU Steel Buyers Sentiment Index history. Note that it can only be seen while reading this article on our website. If you need any help logging into or navigating the website, contact us at or (800) 432 3475 and we will be happy to assist you.

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

On a three month moving average (3MMA) basis, Sentiment is  +61.67 which is the down slightly from the +61.83 recorded two weeks ago (record high). The trend, however, is for continued optimism well above the levels seen one year ago when at the beginning of October 2013 our 3MMA was recorded at +38.83.

Looking out three to six months, the SMU Future Sentiment Index was measured this week as being +67 which is up +2 points over mid-September and well above the +51 reported one year ago.

Below is another interactive graphic, this time showing a history of our Steel Buyers Future Sentiment Index.

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

What Our Respondents Are Saying

Demand appears to be one of the key influences to those responding to our questionnaire. We found the following responses left behind during the survey process:

A manufacturing company said, “Our demand has been holding 10%-12% above 2013 since May of this year.”

A Midwest service center told us, “Business improved through first three quarters, Fourth quarter does not show pick up as yet. Will wait and see…”

A manufacturing company associated with the construction industry told us, “In some markets we see dramatic demand improvement, and flat to down in others.”

While a trading company reported, “”Potential’ trade cases are still hanging over the industry.”

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, 45 percent were manufacturing companies (up 4 percent from our last survey) and 41 percent were service centers/distributors (down 4 percent from our last survey). The balance of the respondents are made up of steel mills, trading companies and toll processors involved in the steel business.

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