SMU Steel Buyers Sentiment Index: Optimism Not Up with Prices

Steel prices are up, but the same cannot be said for industry optimism. Following a brief uptick shortly after the mill price increases were announced last month, Steel Market Update’s Steel Buyers Sentiment Index has ticked back down. Steel buyers’ comments suggest that concerns about the economy, steel demand and the staying power of the higher prices are weighing on industry sentiment.

The goal of SMU’s Buyers Sentiment Index is to measure how buyers and sellers of steel feel about their company’s ability to be successful today (Current Sentiment Index), as well as three to six months into the future (Future Sentiment Index). Results are posted as both single data points and as three-month moving averages (3MMAs) to smooth out the trend. As the charts below show, sentiment has been on a downward slope for much of the year, as measured by the 3MMAs. Note that all the current readings are above zero and on the optimistic half of SMU’s scale. Therefore, industry sentiment overall remains fairly positive on a historical basis. But the market is clearly less optimistic than it was at this time in 2018.