SMU MoMo Flattening Out

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S. remained in positive territory this week for the 15th consecutive week. MoMo, a trailing indicator, is based upon the current hot rolled coil price weighed against the previous 12-week average spot price as recorded by Steel Market Update. MoMo was measured at 0.91 percent this week, down from 1.57 percent last week, meaning that we are currently above price levels from 12 weeks ago but the gap is narrowing.

The change in MoMo can be a useful indicator in depicting the severity of price movements. Looking at the change on a 3-week moving average, we see that trend in HRC price movement fluctuation has begun to flatten out over the past 3 weeks. The 3-week average change in MoMo is -0.97 percent, a slight increase for the 2nd week in a row after 10 weeks of consecutive declines. The graph below demonstrates the relationship between the SMU hot rolled coil price and the three week moving average change in MoMo. Our HRC price range for this week is unchanged at $630- $660/ton with an average price of $645/ton.