SMU Data and Models
January 30, 2014
SMU MoMo Index Declines Due to Lower Prices
Written by Brett Linton
The Steel Market Update Price MoMo Index for flat rolled steel in the U.S turned negative this week after being in positive territory for 15 consecutive 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 -0.87 percent this week, meaning that the current HRC price is slightly 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 -1.55 percent this week, down from 0.62 percent the week before. Looking at this change on a 3-week moving average, we see that the trend in HRC price fluctuation has started to show an overall negative direction for HRC prices. The 3-week average change in MoMo is -0.85 percent, down from 0.06 last week.
