SMU Data and Models
SMU Steel Buyers Sentiment: Optimism Holding Steady
Written by Tim Triplett
January 20, 2022
Steel Buyers Sentiment, as measured by Steel Market Update, has seen little change in the past two months despite declining steel prices and concerns about the economy and COVID heading into 2022.
SMU surveys buyers every two weeks and asks how they view their chances of success in the near and longer term. SMU’s Current Sentiment Index registered +71 this week, down just 2 points since early January. Current Sentiment has been steady in the low to mid 70s since late November.
Future Sentiment – which measures buyers’ feelings about their prospects three to six months in the future – has dropped by only a single point since SMU’s last survey to a reading of +64. It also has moved up and down in a very narrow range over the past eight weeks.
Both sentiment readings are still near their all-time highs, which points to a generally positive outlook among steel buyers. Indeed, 72% of the service center and manufacturing executives who responded to SMU’s questionnaire this week said they are optimistic about their prospects for the first half of this year.
What Respondents Had to Say
“It ain’t 2021, but it’s still pretty darn good.”
“We’re good as long as prices don’t go too low.”
“It all depends on how rapidly prices decline and if demand can hold up.”
“The crystal ball gets a bit murkier for the 2H, but as long as we’re still over $1,000/ton, things will be great for mills and service centers.”
“Steel markets will bottom out in the end of the second quarter and should stabilize, so we expect demand to be steady – and to increase when automotive returns.”
“Our inventory is overpriced.”
“Not really sure what to expect, but it’s definitely a different vibe from six months ago.”
“It’s a daily grind.”
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 run from +10 to +100. A positive reading means the meter on the right-hand side of our home page will fall in the green area indicating optimistic sentiment. Negative readings run from -10 to -100. They result in the meter on our homepage trending into the red, indicating 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. Sentiment is measured via Steel Market Update surveys that are conducted twice per month. We display the meter on our home page.
We send invitations to participate in our survey to more than 600 North American companies. Our normal response rate is 100-150 companies. Approximately 40 percent are manufacturers, 45 percent are service centers/distributors, and 15 percent are steel mills, trading companies or 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.
By Tim Triplett, Tim@SteelMarketUpdate.com
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
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, or if […]
SMU survey: Buyers’ Sentiment finishes April on the upswing
SMU’s Steel Buyers’ Sentiment Indices both rose this week to reach some of the highest levels seen this year.
SMU survey: HR, plate lead times slip as CR extends
Hot-rolled coil and plate lead times contracted this week, with most other products remaining flat, according to SMU's most recent survey data. Cold-rolled products, however, saw lead times extend 0.1 weeks to an average of 7.5 weeks vs. two weeks earlier. Hot rolled and plate lead times both contracted 0.3 weeks from our last market check.
SMU survey: Sheet buyers find mills more willing to negotiate spot prices
Sheet steel buyers said mills are more willing to talk price on spot orders, according to our most recent survey data.
Steelmaking raw material prices mixed in April
Prices of steelmaking raw materials have moved in different directions over the last 30 days, according to Steel Market Update’s latest analysis.