The Impact Of The Fluctuation Of The Price Of Raw And Fuel On Chinese Steel Market Based On Price Transmission Mechanism

Steel production is a traditional industry.The development of the steel industry has become an important symbol of national progress.At present,China's steel output has exceeded the total output of the United States and Japan.And China has become a well-deserved steel superpower in the world.However,under the background of economic slowdown and industrial restructuring,there still exists a series of problems such as overcapacity and low profits.However,in the market economy,the allocation of resources is mainly conducted by the market actors under the guidance of price changes.Price is one of the core indicators of economic operation.Its volatility is regarded as an extremely important macroeconomic phenomenon.If we can clearly understand the interaction between the upstream and downstream product fluctuations in the steel market,our steel industry and related industries will be able to formulate more rational and targeted production plans and business strategy decisions in time so as to reduce costs and increase profit.It can realizes the steady development of China's steel market and also be of great benefit to the economic development of our country.At present,most scholars at home and abroad have studied the steel market from both game theory and market supply and demand theory.However,there are few studies on the transmission mechanism of the price fluctuation of upstream and downstream products in the steel market.Therefore,based on the price transmission mechanism and using the econometrics software such as EVIEWS and GAUSS,based on the theory of statistics and economics,the paper first conducts a static analysis on the conduction of the price fluctuation of the upstream and downstream products in the steel market.Through the co-integration analysis,Granger Causal test and so on,it is found that there exists conduction effect between the upstream and downstream products,of which the upstream product price fluctuation has a good conduction effect on the downstream products and a short time lag.Second,considering the changes in the international economic situation and the economic restructuring in our country,the price transmission mechanism in the steel market is studied dynamically combined with the theory of structure mutation and variable parameter model.It is found that the upstream product price fluctuations are still more conducive to the conduction path of downstream products and conduction is better.However,the conduction effect between the upstream and downstream products was significantly enhanced and the impact is more lasting.At last,according to the above research and analysis,the paper puts forward two suggestions that steel enterprises should actively play the function of futures market and reasonably invest mineral resources so as to enhance cost competitive advantage.