SMU Data and Models

SMU MoMo Index Indicates Price Momentum Flattening Out

Written by Brett Linton

January 15, 2014

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S remained positive this week, but only slightly so, and is currently in its 14th consecutive week of being in positive 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 0.06 percent this week, meaning that the current HRC price is slightly 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 -1.62 percent this week, down from 1.18 percent the week before. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation has moved back into negative territory after a slight increase last week. The 3-week average change in MoMo is -0.27 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 $650-$690/ton with an average price of $670/ton.

{amchart id=”70″ SMU Price MoMo Index}

Brett Linton

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.

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