Utilizing a trailing average hot rolled coil (HRC) price, the SMU/Steel Reality Price Momentum Index for flat rolled steel in the US remained below 0% this past week and Momentum has now been negative for 23 consecutive weeks.
Momentum is based upon the current hot rolled coil price weighed against the previous 12 week average spot price as recorded by Steel Market Update. Momentum or MoMo as we like to call it so as to not confuse it with our SMU Price Momentum Indicator, was measured at -0.60% this week. MoMo rose 1.52% over last week’s recorded measurement of -2.12%. The graph below demonstrates the relationship between hot rolled coil and the momentum in pricing.
The Steel Market Update Price Momentum Indicator – currently at higher – acts as a leading indicator as it factors in ongoing negotiations, imports and import pricing, domestic mill lead times and other factors in order to forecast the direction we see prices moving within a 30 to 60 day window. The SMU/Steel Reality momentum meter – still pointing negative – serves as a lagging indicator demonstrating the historical price momentum trend.
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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.