SMU MoMo Index Shows Little Change in Price Movement

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S. remained negative this week for the 2nd week after 15 consecutive weeks in positive territory. 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 -0.39 percent this week, up from -0.97 percent last week, meaning that the current HRC price is below the average price from the previous 12 weeks.

The change in MoMo can be a useful indicator in depicting the severity of price movements. Looking at this change on a 3-week moving average, we see that trend in HRC price fluctuation has begun flatten out over the past 4 or 5 weeks. The 3-week average change in MoMo is -0.65 percent, a slight increase for the 4th 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 up slight to $630- $650/ton with an average price of $640/ton.