SMU MoMo Index at Highest Level since July 2013

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S was positive this week for the 5th week in a row after being in negative territory for the prior 10 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 5.52 percent this week, meaning that the current HRC price is higher than the average price over the previous 12 weeks. The last time the SMU Price MoMo Index was this high was on July 30th, 2013.

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 +1.14 percent, back to the trend we were used to seeing before the -0.20 change last week. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation has been showing a positive direction for HRC prices over the past 7 weeks. The 3-week average change in MoMo is +0.53 percent, down from +0.94 last week.