SMU Data and Models
SMU Steel Buyers Sentiment Index Steady, 3MMAs Decline
Written by Brett Linton
June 10, 2022
Steel Market Update’s Steel Buyers Sentiment Index remained unchanged last week, holding steady at the third-lowest level seen in the past 13 months. Our Future Sentiment Index also remains unchanged compared to our late-May reading (which was the largest survey-to-survey decline since March 2020).
SMU surveys steel buyers every other week and asks how they view their chances of success in the current market and a few months down the road. SMU’s Buyers Sentiment Index registered +70 last week, down from +78 one month prior and down from a peak of +82 in late March.
SMU’s Future Buyers Sentiment Index, which measures buyers’ feelings about business conditions three to six months in the future, remained at +64, back in line with early-2022 levels. Just one month ago, in late April and early May, we saw record high Future Sentiment readings (the highest recorded in our 13.5-year history).
Recall that as steel prices had peaked last September, Current Sentiment reached an all-time high of +84, while Future Sentiment peaked two months later at +78. The lowest levels over the past decade both occurred in April 2020, at -8 and +10 respectively.
Measured as a three-month moving average, the Current Sentiment 3MMA has eased to +76.33, and the Future Sentiment 3MMA declined to +73.17. Two weeks ago, the Current Sentiment 3MMA had reached the highest level seen since December 2021, +77.83. Future Sentiment 3MMA had reached a record high of +74.67 in mid-May, surpassing the previous record of +73.67 in March 2017, but has eased each with each reading since then.
What SMU Survey Respondents Had to Say
“Order book still strong, despite some signs of weakening demand.”
“We are managing inventory responsibly and listening to our customers’ needs.”
“Business is steady, but when the market drops dramatically, we are all adversely effected. We try our best to tie purchases to contracts, but like many other service centers, we do have exposure when the market turns in an unfavorable direction.”
“Current market conditions are better than sentiment, and eventually real demand will overtake this buyers’ pause.”
“As long as prices do not decline too much too fast, it will balance out.”
“We have proven to be extremely agile over the tumult of the last few years and have positioned ourselves to continue to be the leader in the market.”
“While activity and prices are predicted to decrease, we are still optimistic we can be successful through the year.”
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
Read more from Brett LintonLatest in SMU Data and Models
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.
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.
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.
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.
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 […]