SMU HR Price MoMo Index Turns Negative After 28 Weeks

MoMo was measured at -0.77 percent this week, meaning that the current HRC price is lower than the average price over 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 for flat rolled steel prices. The week-over-week change in MoMo was -1.96 percent, following a change of -1.61 percent last week. This indicates that there is a downward movement in hot rolled price momentum and that movement has slightly accelerated compared to the previous week.

To get a wider sense of the change in the MoMo Index and eliminate weekly fluctuations, we calculate a 3-week average change. The 3-week average change in the MoMo Index is -2.24 percent, following a change of -2.35 percent the week before. This also shows that there is a downward movement in hot rolled price momentum and the rate is similar to that of the previous 3-week period.

The graph below demonstrates the relationship between the SMU hot rolled coil price, the SMU Price MoMo Index, and the three week moving average change in the MoMo Index. As published in our Tuesday evening issue, the SMU HRC price range for this week is $600-$630 per ton with an average price of $615, down $5 per ton from last week.