SMU Data and Models

Steel Buyers Sentiment Jumps 11 Points, Biggest Move Since October 2020
Written by Brett Linton
March 18, 2022
SMU’s Steel Buyers Sentiment Index surged 11 points this week, the largest change from one survey to the next in 17 months. The surprising jump in sentiment correlates with the unexpected rebound in steel prices caused by the conflict in Ukraine.
Steel Market Update’s check of the market this week pegged the benchmark price for hot rolled coil at $1,260 per ton, up from $1,000 per ton just two weeks earlier. That’s a big rebound for steel prices, which had been trending downward for the past six months. The spread between current and future sentiment suggests the market feels positive about the strengthening steel prices today, but is less confident about the economy tomorrow due to the war, inflation and lingering supply-chain issues.
Steel Market Update 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 +79 this week, up from +68 in early March, and tied with four other months for the fourth highest reading ever recorded.
Future Sentiment – which measures buyers’ feelings about their prospects three to six months in the future – inched up 1 point to +69.
In early September when steel prices were at their peak, Current Sentiment reached an all-time high of +84 and Future Sentiment a near-record +75.
Measured as a three-month moving average, the Current Sentiment 3MMA is at +71.50 and the Future Sentiment 3MMA is at +66.00, showing that steel buyers’ attitudes are mostly unchanged despite volatile market conditions.
What Respondents Had to Say
“We have good orders from customers that stocked up and are suddenly reordering.”
“Our profits were already off-the-charts as we clung to the 2021 environment, but now the craziness is returning – and we do very well in the chaos.”
“Prices had dropped artificially based on very few sales and limited information. Now prices are back to where they should be.”
“Our customers are busy and volumes are good.”
“We are still under pressure due to freight cost changes and port congestion issues.”
Tracking steel buyers’ sentiment is helpful in predicting their future behavior.
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 35 percent are manufacturers, 50 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 Brett Linton, Brett@SteelMarketUpdate.com

Brett Linton
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