Research On The Phenomenon And Influencing Factors Of Nonferrous Metal Commodity Financialization

As the largest manufacturing country in the world,China's consumption of copper and aluminum accounted for more than 50% of global consumption in 2018.With more and more financial capital participating in the commodity market after the 21 st century,the commodity market shows the characteristics of financialization,and the correlation with the stock market is also changing.Under such a background,the price of nonferrous metal appears a phenomenon similar to the sharp rise and fall of financial assets.As an important industrial raw material,nonferrous metal affect the development of China's economy.In this paper,we summarize the relevant literature of commodity finance and the theoretical mechanism of the linkage between the commodity market and the stock market.We find that the capital rotation effect and the market risk contagion effect can changes in the correlation between the two market in the financial market channel.This paper first verifies whether there is financial phenomenon in the nonferrous metal commodity market,and then analyzes the factors that affect the correlation between the nonferrous metal commodity and the stock market.In this paper,nonferrous commodity index,Shanghai stock index and copper,aluminum and zinc are selected to study the financial phenomenon in the nonferrous commodity market,we select the data from April 17,1995 to March 26,2018.The dynamic correlation coefficient between assets is obtained by establishing DCC-GARCH model,and the phenomenon of financialization and financial stratification are studied according to the change of correlation coefficient.Then,based on the risk contagion effect and portfolio theory,we select the correlation coefficient,financing liquidity,stock market volatility from March 26,2007 to March 26,2018 to study the factors influencing the correlation in three stages.It is found that after 2004,the correlation between nonferrous metal commodity market and stock market began to rise,and the degree of finance among different kinds of nonferrous metal commodities is different.During the financial crisis,the explanation of the correlation of financing liquidity is significant.After the financial crisis,the explanation of stock market volatility is strong.When the inter market contagion effect is strong,the external market risk will have the same impact on the two markets through the risk contagion effect,and the correlation between the markets will be strengthened.After the nonferrous metal commodity is regarded as a kind of asset and added into the portfolio,there is a substitution effect between the nonferrous metal commodity and the stock market,resulting in the phenomenon of capital rotation.With the development of commodity financialization,the relationship between nonferrous metal market and stock market is very complex,which leads to different characteristics of correlation in different time periods.Under the influence of market risk contagion effect,capital rotation,the nonferrous metal financialization shows different characteristics in different periods.