The Study Of The Relationship Between The Worldindustrial Production And Copper Future Price In LME Based On STAR Model

Since the London Metal Exchange (LME) had been established in 1877, copper future trading has been 131 years of history, it always occupies an important position in the world metal future exchange, even in the future exchange in the world.In this 131-year history, many scholars domestic and abroad used many kinds of mathematical models and measurement methods to study copper future in the pricing model, the impact factors of copper prices and the fluctuations of copper price, they acquired a large number of fruitful and valuable achievements. On the relation of the world economy and copper prices, previous studies used GDP or GNP as a measure of the world economy variables, and they studied the relation between the world economy and the copper price only from the perspective of linear model. On the other hand, the collected samples were also limited in Europe, the United States and other developed countries and regions.To make up for these deficiencies of past scholars, this paper uses the index of word industrial production as the world economy variable. Collected data from 36 countries (particularly including the emerging market countries "BRIC" and "VISTA"), which long-term cover about 85% of the total world economy proportion, so the sample is very representative. Try to establish the non-linear regression model—STAR model which is more popular in this century. The STAR model we have established indicates that the relation between the copper future price and the index of world industrial production is not simple linear but non-linear. Thus we more close to describe and simulate the non-linear relationship between copper future price and index of world industrial production. These conclusions provide more valuable reference for the investors and managers.