SMU MoMo Index Indicates Price Momentum Flattening Out

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S remained positive this week, but only slightly so, and is currently in its 14^th consecutive week of being in positive territory. MoMo, a trailing indicator, is based upon the current hot rolled coil (HRC) price weighed against the previous 12-week average spot price as recorded by Steel Market Update. MoMo was measured at 0.06 percent this week, meaning that the current HRC price is slightly above the average price over 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 -1.62 percent this week, down from 1.18 percent the week before. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation has moved back into negative territory after a slight increase last week. The 3-week average change in MoMo is -0.27 percent, meaning that the overall movement in HRC prices over the previous 12 weeks has been very minor.