Domestic And Metals Futures Market Price Linkage Analysis

As the international economic integration, China’s economic ties with the worldeconomy has become increasingly close contact futures market, especially in the metalfutures markets more closely, the futures market because of its price discovery, hedgingfunction, so the metal futures pricing on a country’s overall economic strength and moreimportant.In this paper, the Shanghai Futures Exchange (SHFE), the London Metal Exchange(LME) for domestic futures market, the domestic futures market price linkage studies,zinc (ZN) and aluminum (AL) for the selected futures, selected time span of2013, thelatest278pairs of time series data on January4to March12,2014in; in ADF unit roottest, cointegration test, error correction model, Granger causality test, etc., as the empiricalanalysis; In this paper, the fundamentals of the domestic futures market, futures linkageanalysis and collate relevant theoretical methods introduced by empirical analysis of thelatest data, the status quo at home and abroad to study the metals futures market pricing.Conclusions showed that: Shanghai Futures Exchange has a stable equilibriumrelationship with the London Metal Exchange where the long term, suggesting thatdomestic futures market price linkage is strong. Through comparative analysis of domesticzinc, aluminum prices have received two contracts in the short term impact of the Londonarea, showed Shanghai Futures Exchange are gradually mature. But the more specificaspects of the relationship guide price performance to guide the domestic futures marketfor foreign futures markets. This shows that at this stage the domestic futures marketrelative to the foreign futures market in terms of weak futures market maturity and level ofactivity to be improved in terms of international pricing.