SMU Data and Models
SMU MoMo Index Remains Positive
Written by Brett Linton
January 8, 2014
The Steel Market Update Price MoMo Index for flat rolled steel in the U.S. remained positive this week for the 13th week in a row after 4 consecutive weeks of being in negative territory. MoMo, a trailing indicator, is based upon the current hot rolled coil (HRC) price weighed against the previous 12-week average spot price as recorded by Steel Market Update. MoMo was measured at 1.68 percent this week, meaning that the current HRC price is above the average price over the previous 12 weeks.
The change in MoMo can be a useful indicator in depicting the severity of price movements. The week-over-week change in MoMo was 1.18 percent this week, up from -0.38 percent the week before. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation has started to increase after being slightly negative over the last 8 weeks. The 3-week average change in MoMo is 0.12 percent, meaning that the overall movement in HRC prices over the previous 12 weeks has been very minor.
The graph below demonstrates the relationship between the SMU hot rolled coil price and the three week moving average change in MoMo. Published in our Tuesday evening issue, the SMU HRC price range for this week is $660-$700/ton with an average price of $680/ton. The graph is only visible if you are logged into the SMU website and reading the article from either your mobile device, laptop or office computer.
{amchart id=”70″ SMU Price MoMo Index}
Brett Linton
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