SMU MoMo Index Shifting into Lower Gear

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S was negative this week for the second week in a row after being in positive territory for the prior ten 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 -1.74 percent this week, meaning that the current HRC price is lower than 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 -0.93 percent, the seventh consecutive week-over-week decline. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation is showing a negative direction for HRC prices for the sixth week in a row. The 3-week average change in MoMo is -0.91 percent, up from -1.07 last week.