Buyers and sellers of flat rolled steel responding to our early November flat rolled steel market trends survey were found to be of the same mind as what we measured in the middle of October. Current Sentiment* was recorded as being +53.00 the same as what we reported in mid-October. The +53 is the best reading since early September when we measured Sentiment as being +63.00. One year ago our single data point for Sentiment was +36.
*Current Sentiment Index: How do steel buyers and sellers of flat rolled steel feel about their company’s ability to be successful in today’s market conditions. Future Sentiment is how these same buyers and sellers feel about their company’s ability to be successful 3 to 6 months into the future.
We prefer to look at our data based on a rolling three month moving average (3MMA) which takes some of the burps and giggles out of the numbers and provides us with a better feel for the trend. Our 3MMA for Current Sentiment is +53.67 which is lower than the +54.50 reported during the middle of October. On year ago the 3MMA was +42.50.
The trend line for Current Sentiment has our respondents as being less optimistic. The trend began in early July 2016 and we believe we could get one more down stroke before Sentiment bottoms and moves back up. We feel the market trends to react to a change in flat rolled prices as a good thing and, thus, more optimistic for their company’s ability to be successful in the current market environment.
SMU Future Steel Buyers Sentiment Index
Future Sentiment was measured this week as being +63 which is two points higher than our mid-October index. One year ago Future Sentiment was +50 and close to bottoming out (it bottomed during the 1st week of December at +51).
When looking at Future Sentiment from a three month moving average (3MMA) perspective our index is now +60.33, slightly lower than the +60.50 recorded one year ago. The trend for Future Sentiment based on a 3MMA is that we are at a bottom and the market is trying to decide where it wants to go from here.
It is important to point out that positive (+) readings mean buyers and sellers are optimistic about their company’s chances for success. We actually saw the most optimistic numbers ever for our index earlier this year as Current Sentiment hit +71 twice (April 15 and July 1, 2016) and the 3MMA for Current Sentiment also reached its zenith on July 1, 2016 at +69.17.
What our Respondents are Saying
“We have good product, on time delivery and responsive customer service. Recent price increases will help.” This steel mill went on to say, “Trump victory should be good for domestic steelmakers.”
“Unknown [products improving, declining or remaining the same?] we need to get past this election thank God it’s almost over.” Service center
“Government intervention will play a large part in whether or not any manufacturer can be successful. Can’t be certain of anything with government constantly meddling to manipulate prices.” Manufacturing company
“Plate products appear to be slowly improving demand as the expectation on infrastructure spending is mounting.” 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 100-170 companies. Of those responding to this week’s survey, 41 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.
John PackardRead more from John Packard
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