The Empirical Study On The Price Discovery Function Of Cooper Future Of SHFE

With the rapid economical development, the demand for some raw materials is increased in China, and copper one of these materials. The demand for copper in China has exceeded the U.S. since the year of 2002. And China has become the largest consumer of copper in the world market. Because copper resources is very scarce in China, we have to import a great deal of copper annually, while the right of pricing internationally is seized by a few of the western countries. Despite international influence of copper future of SHFE has grown greater in the recent years, China's share of the right of copper pricing internationally is not coincidental. Obviously it is unfair for China, and this situation will be adverse for us or even threaten our economic security in the long run..The copper futures market of SHFE has already become the second largest copper futures market after LME in the world, however, if China wants to get more share of the international copper pricing right in accordance with the amount of imports, we must enhance the function of copper futures market of SHFE,advance market efficiency, and embody the supply and demand of the cash market.Price discovery is a basic function of futures market, and it is also the foundation of venture investment and hedge,so we should enhance price discovery function if we want to enhance the function of future market. Therefore, it has undoubtedly significant theoretic meaning and practice value to research the state of price discovery function of the future copper market of SHFE. This article firstly summarize domestic and overseas related research in order to know the research status and to use for reference. Secondly, it generally introduces the exchange condition of copper market. Thirdly, it theoretically analyzes the shape mechanism of price discovery of futures markets. In the end, several econometrics methods and models are used to investigate price discovery of copper futures market of SHFE in order to find the deficiency existing in the market, and to offer perfective advice accordingly.This article draws three conclusions as follows via empirical study:1. Copper futures market of SHFE has the function of price discovery in the long run.2. Copper futures market of SHFE exerts dominant effect in price discovery.3 The efficiency of copper futures market of SHFE is low, subjecting to further improvement.This article puts forward three suggestions accordingly as follows:1. Making full use of the network information technology to accelerate construction of cashmarket.2. Further consummate the information disclosure system..3. Enlarge international influence of copper futures market of SHFE in virtue of the chance of rapid development of China's economy.