SMU Data and Models
SMU MoMo Index Continues Rising Trend
Written by Brett Linton
December 11, 2013
The Steel Market Update Price MoMo Index for flat rolled steel in the U.S. remained positive this week for the 9th week in a row after 4 consecutive weeks of being in negative territory. MoMo, a trailing indicator, is based upon the current hot rolled coil price weighed against the previous 12-week average spot price as recorded by Steel Market Update. MoMo was measured at 2.47 percent this week, meaning that the current HRC price is above the average price from the previous 12 weeks.
The change in MoMo can be a useful indicator in depicting the severity of price movements. The week over week change in MoMo was 0.24 percent this week, up from 0.33 percent the week before. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation has been relatively flat over the last 7 weeks after a sharp increase for the 3 weeks prior. The 3-week average change in MoMo is -0.14 percent, meaning that the change in HRC prices over the previous 12 weeks has been very minor.
The graph below demonstrates the relationship between the SMU hot rolled coil price and the three week moving average change in MoMo. Published in our Tuesday evening issue, the SMU HRC price range for this week is $660-$690/ton with an average price of $675/ton. This graphic can be seen by reading the newsletter on our website however, it cannot be viewed in the email version of our newsletter (the one in your inbox – click on the Read Full Text to go to the website where you will need to log in if you logged out on previous occasions).
{amchart id=”70″ SMU Price MoMo Index}
Brett Linton
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