Analysis Of The Impacts Of China's Copper Supply And Demand On International Price

With the industrialization and urbanization,China's demand for copper is rising,a large number of copper need to be imported.Due to the lack of the right to speak,China has to pay a premium price.The LME has international copper pricing power.With the competition for international pricing,SHFE launched standard copper contracts in 1993.Chinese domestic copper market is limited by size,capital controls and other factors;SHFE and LME have weaker links.In 2002 China's WTO accession,which is integrated into the global copper industry,SHFE and LME copper prices generate links,but LME mainly impact SHFE.In 2005,a large number of private enterprises take into the metals industry,it lead a sharp rise in Chinese copper demand and supply,Chinese impact on international prices are increasing,SHFE copper began to have a significant impact on the LME.After the financial crisis,due to the troubled European economies,China's copper market supply and demand on the international copper prices is critical,SHFE surpass COMEX on the international influence,worse than LME.Due to market supply and demand,China has more influence on the international copper prices.Existing research mainly research impact of Chinese supply and demand on the international copper from a macro point of view,So paper research impact of Chinese supply and demand on the international copper from the microscopic point of view has important significance,It not only can improve the previous study,but also have great importance on China's copper industry consolidation.Firstly,the paper introduces the copper chain and pricing mechanism.Secondly,the paper provides the oretical interpretation of the effect of Chinese copper market supply and demand on the international price of copper.Thirdly,the paper analyzes how Chinese copper market supply and demand influence the international price of copper.They can take advantage of spot trading or the linkage effects to affect international copper prices.At last,the paper analyzes the impact of Chinese market supply and demand on copper international prices.In the empirical part,firstly,the paper use Granger causality test,screened out of the supply and demand variables which affect international copper prices.Secondly,the paper takes these variables into VAR model.Thirdly,the paper use impulse response and variance analysis to analysis impact of these variables on the international copper prices.The analysis showed that some variables have significant impact on international prices,which include Chinese imports of copper concentrate,refined copper output and exports of refined copper,copper production.Chinese imports of copper concentrate can affect international copper prices by spot trading or the linkage effects.Refined copper output and copper production can affect international copper prices by the linkage effects.refined copper exports affect international copper prices by spot trading.With respect to the demand side,Chinese supply factors have greater impact on international copper prices.