SMU Data and Models

SMU MoMo Index Starting to Falter

Written by Brett Linton

May 22, 2014

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S was positive this week for the 7th week in a row after being in negative territory for the prior 10 weeks. However, the Index dropped 2.06 percent in one week after dropping 0.54 percent the week prior. 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 2.92 percent this week, meaning that the current HRC price is higher than 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 of prices. The week-over-week change in MoMo was -2.06 percent, quite a jump compared to the -0.54 percent change the previous week. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation is now showing a negative direction for HRC prices for the first time in 8 weeks. The 3-week average change in MoMo is -0.49 percent, down from +0.13 last week.

The interactive 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-$690/ton with an average price of $675/ton, down $10 per ton from last week.

SMU Note: You can view the interactive graphic below when you are logged into the website and reading the newsletter online. If you have not logged into the website in the past and need a new user name and password we can do that for you out of our office. Contact us at: info@SteelMarketUpdate.com or by calling 800-432-3475. If you need help navigating the website we would also be very happy to assist you.

{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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