SMU Price MoMo Index Continues to Drift

MoMo was measured at 8.15 percent this week, meaning that the current HRC price is higher than the average price over the last 12 weeks. This is the lowest reading since November 22, 2016 when MoMo was 7.04 percent.

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 -1.49 percent, following a change of -1.64 percent last week. This indicates that there continues to be a downward movement in hot rolled price momentum.

To get a wider sense of the change in the MoMo Index and eliminate weekly fluctuations, we take an average of the MoMo changes over the past three weeks, a three week moving average (3WMA). The 3WMA change in the MoMo Index is -1.29 percent, following a change of -1.49 percent the week. This also shows that there is a downward movement in hot rolled price momentum. This is the fourth negative 3WMA movement in a row, and we had previously not seen a negative 3WMA since October 18, 2016.

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. Click here to view and interact with it on our website. As published in our Tuesday evening newsletter, the latest SMU HRC price range is $620-$640 per ton with an average price of $630, up $5 over one week ago.