Oct. 3, 2012
SMU Steel Buyers Sentiment
Falls to Lowest Level in a Year
As of Sept. 20, the Steel Market Update Steel Buyers Sentiment Index was measured at plus 14, down 5 points from earlier last month. The reading was the lowest level of the year and the lowest SMU has recorded since November 2011. The high for the year at plus 49 was achieved in mid-January, which was also the historical high for the index that began in November 2008. The lowest reading ever recorded was the minus 85 measured during the first week of March 2009. Any reading above zero indicates a respondent was optimistic about his or her company’s ability to be successful in current market conditions.
Uncertainty seemed to be the common theme reported to Steel Market Update during the survey process last month. “Why do I feel like we are all on pins and needles?” asked one service center operator. Others expressed concern about the direction of prices over the next two months after seeing prices move off their highs of the most recent cycle (as short as it was) and devaluing inventories. “We anticipate a year-end slump in pricing because of the overall slowdown in the global economy,” said a service center executive in the West. “Too much supply and not enough demand,” summed up another in the Midwest.
According to SMU, which tracks price momentum, flat-rolled steel prices were moving lower and the pace of change was accelerating as of late September.
Steel Market Update will host its Steel Summit Conference on Monday, Oct. 8, in Chicago. The event includes a free pre-summit workshop on hot-rolled futures and scrap futures trading as a means of managing price risk. For more information, visit www.steelmarketupdate.com.