SMU Data and Models

Buyers & Sellers of Steel Less Optimistic about both Current & Future Business for their Company

December 3, 2015

Steel Market Update (SMU) Steel Buyers Sentiment Index continued its long slide as buyers and sellers of flat rolled steel are less optimistic this week regarding their company’s ability to be successful both in the existing (Current) market as well as three to six months into the future (Future). Respondents to our queries regarding Sentiment pointed to seasonal factors (winter weather) as one of the main reasons for the less optimistic viewpoint. Even so, buyers and sellers of steel are optimistic about now and the future – just less so than what we were reporting earlier this year.

SMU Current Steel Buyers Sentiment Index is +34 down 3 points from the middle of November and 27 points lower than the +61 reported during the middle of June 2015. Compared to one year ago, Current Sentiment is 18 points lower than the beginning of December 2014.

In order to smooth out the numbers and take out some of the gyrations that can occur in any one reporting period, we use a three month moving average (3MMA). The 3MMA for our Current Sentiment Index is +37.17, 2.66 points lower than what we reported during the middle of November. The last time our 3MMA was this low was in August 2013.

Future Sentiment Also Lower

SMU Future Sentiment Index, which looks at how buyers and sellers of steel feel about their company’s ability to be successful three to six months into the future, dropped 1 point to +46. The 3 month moving average also decline and is now at +46.83 which, like Current Sentiment above, is the least optimistic we have seen this index since August 2013.

What our Respondents are Saying:

A service center reported business conditions as being “poor” and told us during the process, “No immediate signs that things are going to change anytime soon.”

A manufacturing company located in Canada reported business conditions as being “fair” and told us, “Weather could/should be a factor over the next 3-4 months.”

Another service center reported business conditions as being “fair” and told us during the process, “Automotive demand good, all others fair.”

We had a number of manufacturing and distributors report weather and seasonal issues impacting their feelings about current and future market conditions.

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, 40 percent were manufacturing and 44 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.