SMU Data and Models
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/61c4fbcc25fe2d4a0e4db19e219e229f.jpg)
SMU Market Trends: Optimists in the Majority
Written by Tim Triplett
February 1, 2022
Steel buyers remain a surprisingly bullish bunch despite rapidly declining steel prices as well as worries about COVID and the broader economy, .
Steel Market Update’s survey this week asked service center and manufacturing executives if they are optimistic or pessimistic about their prospects in the first half of 2022. About 64% considered themselves optimists versus 36% pessimists. That’s slightly more bearish than the 70:30 split in SMU’s survey two weeks ago, but it still says something positive about the steel market heading into February.
Pessimistic comments, below, generally focus on the uncertainty ahead and the difficulty in managing inventories during the ongoing price correction:
“Pricing dropped too suddenly to correct inventory, but orders have remained high.”
“Regardless of economic strength, we are set to lose tens of thousands selling high-cost inventory at dropping market prices.”
“We’re in a cash crunch due to steel commodity volatility.”
“Everyone has high-priced steel in stock and will need to work through it before buying new. It will take weeks. Mills and service centers can cut prices, but there are few buyers – so prices will fall further.”
“I’m buoyed by customer demand, but of course managing the price downturn despite all the planning is never easy.”
“Uncertainty on the downside is just as bad, if not worse, than uncertainty on the upside.”
“The current commodity bubble was created artificially by the steel cartel. The downside to the bubble is always more difficult than the upside.”
“If you have ANY chance for survival in the steel industry, you have to be a pessimist.”
Optimistic comments, below, tend to focus on the persistently strong demand:
“Underlying demand is still strong.”
“End-use demand remains better than anyone cares to admit.”
“Overall end-user demand should remain strong during the first half of 2022. A recovery in automotive production will not occur during the first half and may strengthen during late Q3 or Q4.”
“I am always optimistic about demand being good. It’s the price adjustments that are not good.”
“As an excess prime buyer, we do well in deflating markets.”
“The market is still strong for our products – tin plate coils.”
“Customers need to place orders and will take whatever savings they can get.”
“I’m not quite sure that what we are seeing is real. I feel as if it might turn the opposite way again, but it’s just a gut feeling.”
By Tim Triplett, Tim@SteelMarketUpdate.com
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/tim-triplett.jpeg)
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Premium1.png)
Steelmaking raw material prices ease in July
The majority of steelmaking raw material prices declined in June, following the same trend seen in May, according to SMU’s latest analysis.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU price ranges: HR declines moderate. Are we near a bottom?
SMU’s sheet price ranges slid again this week. But the declines were more pronounced on tandem products whereas prices for hot-rolled coil held roughly steady.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Premium1.png)
Some SMU Key Market Indicators improve, others remain near historic lows
SMU’s Key Market Indicators include data on the economy, raw materials, manufacturing, construction, and steel sheet and long products. They offer a snapshot of current sentiment and the near-term expected trajectory of the economy. All told, nine key indicators point lower, 16 are neutral, and 13 point higher. One thing worth noting: The nine indicators pointing lower are all lagging indicators. Many of those pointing upward are leading indicators.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU survey: Steel Buyers’ Sentiment Indices rebound
SMU’s Steel Buyers’ Sentiment Indices both saw improvement this week. Current sentiment ticked higher but remains near the four-year low seen earlier this month. Future Sentiment continues to indicate that buyers are optimistic for future business conditions.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Premium1.png)
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 your […]