SMU MoMo Index Reverses Trend

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S remained negative this week for the 9th consecutive week after being in positive territory for the prior 15 weeks. MoMo, a trailing indicator, is measured as a percentage and shows the relation of the current hot rolled coil (HRC) price movements against the previous 12-week average spot price as recorded by Steel Market Update. MoMo was measured at -2.95 percent this week, meaning that the current HRC price is lower the average price over the previous 12 weeks.

The change in MoMo can be a useful indicator in depicting the severity of price movements and evaluating the directional trend prices may be in. The week-over-week change in MoMo was up 2.03 percent, a reverse in course from what we were seeing in the previous weeks due to our HRC price reversing direction and increasing. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation is now showing a positive direction for HRC prices. The 3-week average change in MoMo is 0.32 percent, up from -0.20 last week.