SMU MoMo Index Turns Positive

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S. turned positive this week after being in negative territory for the prior six 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 0.81 percent this week, meaning that the current HRC price is slightly higher than the average price for the last 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 +0.87 percent, the fourth consecutive week-over-week increase. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation is showing a positive direction for HRC prices for the third week in a row after being negative for the prior eight weeks. The 3-week average change in MoMo is +0.83 percent, up from +0.58 last week.