SMU Scrap Survey: Current Sentiment rises, Future Sentiment stable

Written by Ethan Bernard & Stephen Miller

SMU’s Current Sentiment Index for scrap jumped again in February, according to the latest data from our ferrous scrap survey. Meanwhile, the Future Sentiment Index remained the same for the third consecutive month.

Current Sentiment Index

SMU’s Current Sentiment Index for scrap rose eight points from January to +81 in February. This is the highest sentiment level since we began the survey in February of last year.

Future Sentiment Index

SMU’s Future Sentiment Index was flat at +84 in February for the third straight month. Will rising prices in February push sentiment even higher in March?

What’s going on?

The 81 reading of current scrap sentiment has reached a high point, driven by the rise in scrap prices from January to February.

The trade does not know if the prices paid by consumers will be enough to bring out the needed recycled iron and steel. Therefore, this may be a reason the future sentiment reading is staying flat at 84.

This means sentiment will likely take a pause until the next round of buying. The trade would also like to wait to see whether the optimism expressed by several flat-rolled steelmakers and pundits actually materializes. Over the last three years, scrap prices seriously declined in March and April, so sellers are understandably cautious about this.

About SMU’s Scrap Sentiment

SMU’s Current and Future Scrap Sentiment Indices mirror the Steel Buyers’ Sentiment Indices in our flat-rolled steel survey. They are diffusion indices: readings above 50 indicate a more bullish outlook, while readings below 50 indicate a more bearish one.

Sentiment is only one of the indicators we measure. Our scrap survey, like our steel survey, is available only to premium members. If you would like to upgrade from executive to premium, please contact SMU account executive Luis Corona at luis.corona@crugroup.com. If you’re interested in participating in our scrap survey, please reach out to david.schollaert@crugroup.com.

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

Stephen Miller

Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40-plus years, he has worked in all capacities in the trading business. He has had positions in both domestic and international scrap trading. In addition to scrap, Miller was at the forefront of the pig iron trade and established a pig iron distribution company under the name of Ferrosource, Inc. Most recently, Miller has concentrated on the scrap export market and regularly does consulting for several companies in the industry.