SMU Data and Models

SMU Steel Buyers Sentiment Index Still Strong, Future Expectations at Record High
Written by Brett Linton
May 3, 2022
Steel Market Update’s Steel Buyers Sentiment Index rose 2 points last week, in line with the strong levels we’ve seen over the last six weeks. Our Future Sentiment Index rose to a new high, surpassing a prior record set in November 2021.
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 +80 last week, up 2 points from two weeks prior, but down from the five-month high seen in late March. Current Sentiment is now at the second highest level recorded in 2022.
SMU’s Future Sentiment Index, which measures buyers’ feelings about their prospects three to six months in the future, increased 3 points to +80. This is the highest reading recorded in our 13.5-year history.
Recall that last September, when steel prices had peaked, Current Sentiment reached an all-time high of +84 and Future Sentiment was at a near-record +75. (Future Sentiment peaked at +78 two months later.)
Measured as a three-month moving average, the Current Sentiment 3MMA has risen to +76.17, and the Future Sentiment 3MMA is up to +72.33. Both measures are the highest levels seen since late 2021, indicating that steel buyers’ attitudes remain positive despite volatile market conditions.
What SMU Survey Respondents Had to Say
“Things are remaining very good for service centers and if you’re smart/disciplined, things are even better.”
“Business booked months ago will allow us to do okay for now.”
“We shall see how the market changes but still feel our company will do okay in the future.”
“Demand remains robust but limited production/pull rates due to labor and supply chain constraints.”
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 40 percent are manufacturers, 40 percent are service centers/distributors, and the remainder 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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