The Steel Market Update (SMU) Steel Buyers Sentiment Index is continuing its downward trend, even though the Current Index is 4 points higher and the Future segment of the Index is 9 points higher than what we reported during the middle of October.
The numbers we follow closely are our 3 month moving averages (3MMA) and both the Current and Future Index 3MMA were lower this week.
Current Sentiment +4 Points with 3MMA Down 3.33 points
The SMU Steel Buyers Sentiment Index has two separate measurement points of reference. Our Current Sentiment Index reflects how buyers and sellers of flat rolled steel feel about their company’s ability to be successful in the current market conditions. Our Index is being reported at +36 which is up 4 points from the +32 measured two weeks ago but is 1 point lower than what we reported one month ago. Current Sentiment has been dropping since the middle of June when our Current Sentiment was measured at the highest level (so far) for the year at +61.
Current Sentiment, when looked at based on a three month moving average, is being reported at +42.50 which is down 7.83 points from one month ago and 14.83 points less than the +57.33 reported in early August 2015.
We also look at what buyers and sellers think about their company’s ability to be successful three to six months into the future. Traditionally, our respondents tend to be more optimistic when speaking about future business conditions. That trend continued as we measured Future Sentiment at +50 this week, up 7 points from one month ago.
The Future Sentiment 3MMA is being reported at +50.33 which is 4.67 points lower than what we measured one month ago. The trend moving away from high optimistic level began in early July when we were reporting the 3MMA as being 11.17 points higher.
What Our Respondents are Saying
“Our business is construction related, as we near the winter months, business will drop off.” Manufacturing company
“PLATE: we are well stocked and positioned to service the market with competitively priced quality plate.” Service center
“Weakening.” Service center
“Many complaining that they did not see any pickup in the fall that would help their poor spring due to weather.” Trading company
“Seeing some decline in automotive demand for model year changeover. Also seeing some quarterly customers draw down inventory in Q4.” Service center
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 and 40 percent were service centers/distributors. The balance of the respondents are made up of steel mills, trading companies and toll processors involved in the steel business.
Click here to view an interactive graphic of the SMU Steel Buyers Sentiment Index or the SMU Future Steel Buyers Sentiment Index.
John PackardRead more from John Packard
Latest in SMU Data and Models
SMU survey: Current Buyers’ Sentiment wanes, Future Sentiment rises
SMU’s Current Steel Buyers’ Sentiment Index eased to an eight-week low, according to our most recent survey data.
SMU market survey results now available
The latest SMU market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Historical survey results are also available under that selection. If you need help accessing the survey results, […]
SMU survey: Steel mill lead times near 5-month low
Steel mill lead times shrunk by an average of 0.3 weeks, according to our latest market survey, now nearing levels last seen in September of last year.
SMU survey: Mills more willing to negotiate lower spot prices
Steel buyers generally found mills more willing to negotiate spot pricing on the products SMU surveys this week, according to our most recent survey data.
SMU Steel Demand Index sags, hits four-month low
Steel Market Update’s Steel Demand Index has moved lower, having remained in contraction territory for the better part of the past two months, according to our latest survey data.