SMU Current, Future Buyers Sentiment Indices Edge Down

SMU’s Current Buyers Sentiment Index stood at +77, off two points from the last market check (Figure 1). While steel buyers still remain relatively bullish about current conditions, it’s too early to tell if this drop indicates a trend.

SMU’s Future Buyers Sentiment Index measures buyers’ feelings about business conditions three to six months in the future. This index fell four points to +63 compared with two weeks ago. Relatively in sync since the start of the year, a gap opened up between current and future sentiment in the middle of last month, widening this week to 14 points.

Measured as a three-month moving average, the Current Sentiment 3MMA increased to to +76.33, up half a point from the previous check. (Figure 3). 

The Future Sentiment 3MMA was +68.83, down 1.67 points from +70.5 at the previous check. (Figure 4). 

What SMU Survey Respondents Had to Say:

“All depends on demand.”

“We are very good at what we do and can absorb some but not all of the high cost of steel.”

“Demand is strong, cost is too high.”

“The rapid increase in interest rates will continue to take a toll on the economy/steel demand as new capacity ramps up.”

“Inventories are in a good position.”

“Our sales are down directly related to our increased price to the market, which is dictated by the high cost of steel.”

About the SMU Steel Buyers Sentiment Index

The SMU Steel Buyers Sentiment Index measures the attitude of buyers and sellers of flat-rolled steel products in North America. It is a proprietary product developed by Steel Market Update for the North American steel industry. Tracking steel buyers’ sentiment is helpful in predicting their future behavior.

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 SMU surveys that are conducted twice per month.

We send invitations to participate in our survey to hundreds of North American companies. Approximately 45% of respondents are service centers/distributors, 30% are manufacturers, 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 Current Steel Buyers Sentiment Index and of the SMU Future Steel Buyers Sentiment Index.

By Ethan Bernard, ethan@steelmarketupdate.com