SMU MoMo Index Changes Course

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S. turned negative this week after being in positive territory for the previous four 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 -0.50 percent this week, meaning that the current HRC price is slightly lower than the average price over the last 12 weeks and the trend has been reversed from positive to negative.

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 -1.43 percent, down from 0.00 percent the week before. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation is now showing a negative direction for prices after being positive for the previous six weeks. The 3-week average change in MoMo is -0.48 percent, down from +0.04 last week.