SMU MoMo Index Still in Negative Territory

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S remained negative this week for the 8^th 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 -4.98 percent this week, meaning that the current HRC price is lower the average price over the previous 12 weeks.

The change in MoMo can be a useful indicator in depicting the severity of price movements and evaluating the directional trend prices may be in. The week-over-week change in MoMo was 0.60 percent this week, a change in pace from the -1.67 percent change the week before. This is due to our HRC price remaining unchanged over last week. 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 -0.20 percent, up slightly from -0.76 last week.