SMU Steel Buyers Sentiment Index Sets New Record High

Buyers and sellers of flat rolled steel continue to remain optimistic about their company’s ability to be successful in the current market environment (our Current Sentiment Index). On a single data point our Current Sentiment Index was down -1 point from the beginning of May. However, we prefer to use the three month moving average (3MMA) in order to take any bumps out of individual data points and better provide us an accurate view of the trend. The 3MMA was +1.5 points higher than early May and set a new record high for our Sentiment Index at +67.

We continue to believe the optimism is being created because we are in a rising price environment which raises inventory values and makes it easier to convince customers to pay higher prices. The sharp rise in prices, however, is not good for everyone and manufacturing companies are questioning the validity of the increases which for them are more difficult to pass through to the final product buyer.