SMU MoMo Index Winding Down

The Steel Market Update Price MoMo Index for flat rolled steel in the U.S was positive this week for the tenth week in a row after being in negative territory for the prior ten 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 0.37 percent this week, meaning that the current HRC price is slightly 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 price trend. The week-over-week change in MoMo was -0.63 percent, the fifth consecutive week-over-week decline. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation is showing a negative direction for HRC prices for the fourth week in a row. The 3-week average change in MoMo is -0.85 percent, up from -1.33 last week.