Final Thoughts

Final Thoughts

Written by John Packard


As was mentioned earlier in this issue, the SMU Steel Buyers Sentiment Index has dropped to the least optimistic level seen since 2013. When I started Steel Market Update, one of the first items on my agenda was to develop the Steel Buyers Sentiment Index. I wanted to understand how buyers and sellers of flat rolled steel were feeling about the market they were in, and what their opinions were regarding the markets three to six months into the future.

The company was started in August 2008, and the economy collapsed shortly after. By March 2009, the Steel Buyers Sentiment Index was at its lowest point ever at minus 85 (-85). The lowest level possible is -100….

John Packard Summit 18We are well above the levels last seen during the Great Recession, and we certainly don’t anticipate it going to those kinds of depths. However, it may get back into negative territory by early next year if: 1) prices don’t stabilize, 2) the economy falls into a recession (Alan Beaulieu thinks we will have a couple of slow quarters, but no recession), and 3) if the political situation becomes chaotic.

The Steel Buyers Sentiment Index is a gauge of how comfortable industry players are–and uncomfortable players can lead to interesting competitive situations.

Worth noting–our index is still technically in the optimistic range. It has dropped quite a bit, but it is still there. Second, don’t concentrate on one data point; pay attention to our three-month moving average and the trend. You can find more information about the Steel Buyers Sentiment Index on our website under the Analysis Tab.

A note that I will be traveling on Tuesday and Wednesday of this week as I am speaking to the IPANA (essentially the steel fence industry) in Naples, Fla.

Next week I will be in Cincinnati for three days for our next Steel 101 workshop, and then off to Minnesota for a Board of Trustees meeting for the university I attended.

The third week of October (16 and 17) puts me in Pittsburgh for Metalcon. SMU and CRU will be exhibiting at Metalcon this year, and I look forward to seeing those of you who attend.

The fourth week puts me in Chicago where I will be speaking to NASA (the North American Steel Alliance) on the 22nd. At the end of that week, I will be flying to London and celebrating CRU’s 50th anniversary.

We will begin our end of September Service Center Inventories and Shipments survey beginning on Tuesday, Oct. 1. If your service center would like to participate, or if you would like to learn more about becoming a data provider and what you get out of the process, please contact either myself or Estelle.Tran@crugroup.com

For our readers, if you would like to receive a portion of the data coming from the service centers, you can do so by becoming a Premium level subscriber to Steel Market Update. If you would like to learn more about what Premium membership means, contact Paige Mayhair at 724-720-1012 or by email: Paige@SteelMarketUpdate.com

As always, your business is truly appreciated by all of us here at Steel Market Update.

John Packard, President & CEO

Latest in Final Thoughts

Final thoughts

What's the tea in the steel industry this week? Here's the latest SMU gossip column! Just kidding... kind of. Yes, some of the comments we receive in our weekly flat-rolled market steel buyers' survey are honestly too much to put into print. Some make us laugh. Some make us cringe. Some are cryptic. Most are serious. We appreciate them all. Below are some highlights from our survey results this week. Some of the comments that we can share with you are also included, in italics, in the buyers' own words, with minimal editing on our part.

Final thoughts

Unless you've been under a rock, you know by know that Nucor's published HR price for this week is $760 per short ton, down $65/st from the company’s $825/st a week ago. I could use more colorful words. But I think it’s safe to say that most of the market was not expecting this. For starters, US sheet mills never announce price decreases. (OK, not never. It has come to my attention that Severstal North America rescinded a price increase back on Feb. 14, 2012. And it caused quite the ruckus.)