SMU Data and Models
SMU Steel Buyers Sentiment Index at +62
Written by John Packard
November 6, 2014
It may be a different day but buyers and sellers of flat rolled steel are still singing the same optimistic song regarding their company’s chances of being successful in the current (and future) steel environment. Steel Market Update has been conducting our early November flat rolled steel market survey all week and this afternoon we reported our SMU Steel Buyers Sentiment Index as being +62.
The +62 reading is well within the optimistic range of our index (explanation below) and is an improvement by 3 points over the last measurement which was done in the middle of October. Sentiment is +22 points higher than at the beginning of October 2013.
Below is an interactive graphic of our SMU Steel Buyers Sentiment Index history. Note that the graphic is only available to those reading this article within the Steel Market Update website.
{amchart id=”109″ SMU Steel Buyers Sentiment Index- Survey}
Looking at Sentiment from a three month moving average (3MMA) perspective our current reading is +60.17 which is down from the +61.67 from one month ago. One year ago our 3MMA was +39.33.
Our Future Sentiment Index was measured this week at +59, down 2 points from beginning of October. One year ago Future Sentiment was +53. Below is an interactive graphic of our Future Sentiment Index.
{amchart id=”108″ SMU Steel Buyers Future Sentiment Index- Survey}
We have found that it is not abnormal for our Sentiment Index to get a bit of a bump right after price increase announcements are made. We believe this is due to the number of steel service centers who are responding to our questionnaire. Service centers tend to be optimistic when there is an opportunity to increase the value of their inventories on the floor as well as purchases which have already been made that are in the pipeline for future delivery.
Steel Market Update is finding most companies as being modestly optimistic about business conditions. Where we are seeing weakness is in normal seasonal trends, mining and agricultural markets. We are seeing an uptick in construction and continued strength in energy and automotive markets.
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, 44 percent were manufacturing companies (down 1 percent from our last survey) and 44 percent were service centers/distributors (up 3 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.
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU Survey: Buyers’ Sentiment tumbles as caution increases
SMU’s Buyers’ Sentiment Indices resumed their downward trend this week, erasing the modest recovery seen two weeks ago.
Service centers: Mill orders down further in April
SMU’s Mill Order Index (MOI) declined for a second straight month in April after repeated gains at the start of the year, according to our latest service center inventories data.
SMU Survey: Mill lead times edge lower
Sheet and plate lead times declined across the board this week, according to buyers responding to the latest SMU market survey. While our lead time ranges were unchanged compared to mid-April levels, average production times for each steel product we measure have declined from they were two weeks ago.
SMU Survey: Most buyers say price negotiations back on the table
Domestic mills are largely negotiable on spot prices, according to the majority of steel buyers responding to our latest market survey.
SMU Scrap Survey: Current, Future Sentiment Indices log declines
However, in a month plagued by tariff and economic uncertainty, both current and near-term outlooks for our scrap survey respondents remained surprisingly optimistic.