Product
March 22, 2018
SMU Steel Buyers Sentiment Index: Troubling Signs
Written by Tim Triplett
Both current and future sentiment among flat rolled steel buyers saw a small but positive bump in the past two weeks, perhaps reflecting the announcements and uncertainty from the Trump administration on the steel tariffs that went into effect on March 23. In general, buyers’ attitudes have bounced up and down within a small range over the past few months, and remain at highly optimistic levels from a historical perspective. Steel Market Update’s Steel Buyers Sentiment Index is designed to measure changes in buyers’ optimism levels, which offers insight into their likely decision-making. One troubling sign did arise from the sentiment analysis we just finished.
Current sentiment, measured as a single data point, jumped by seven points in the past two weeks to +66. Measured as a three-month moving average, however, the Current Sentiment 3MMA dropped to +70.33 from +72.00 in early March. The three-month moving average helps to even out the highs and lows. The peak for the index was 74.17 in April 2017. Steel Market Update is concerned about the early slip in our 3-month moving average which tends to be seasonal slipping in late 2nd Quarter through the 3rd Quarter before rising at the end of the year. However, the +70 level is securely in optimistic category for our index as buyers and sellers of steel feel there company can be successful in the existing market conditions.
