SMU MoMo Index at 2+ Year Low

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S remained negative this week for the 7th consecutive week after being in positive territory for the prior 15 weeks. MoMo, a trailing indicator, is measured as a percentage and shows the relation of the current hot rolled coil (HRC) price movements against the previous 12-week average spot price as recorded by Steel Market Update. MoMo was measured at -5.58 percent this week, the lowest measurement since mid-October of 2012.

The change in MoMo can be a useful indicator in depicting the severity of price movements and evaluating the directional trend of prices. The week-over-week change in MoMo was -1.67 percent this week, down from the slight uptick of 0.48 percent the week prior. Looking at this change on a 3 week moving average, we see that the trend in HRC price fluctuation is showing an overall negative direction for HRC prices. The 3-week average change in MoMo is -0.76 percent, down from -0.60 last week.