IDEAS home Printed from https://ideas.repec.org/a/spr/minecn/v36y2023i3d10.1007_s13563-023-00371-5.html
   My bibliography  Save this article

Metal market analysis: an empirical model for copper supply and demand in US market

Author

Listed:
  • Sayeh Shojaeinia

    (Colorado School of Mines)

Abstract

Copper is expected to play a big role in the global move, as solar, wind, and electric vehicles increase. Understanding the metal market and forecasting price changes can help players plan for future changes in supply and demand. Developing dynamic models of demand and supply requires considering price elasticity. In static prediction models, price elasticity is ignored, and the future quantity demanded is predicted without taking into consideration the relationship between price and quantity. A framework is proposed to determine the price elasticity of supply and demand of copper from 1990 to 2020 using production, consumption, and price data. The presented results show that both supply and demand price elasticities in the copper market in the long run are small but statistically significant. In this situation, rather than no change in price, there would be a small change in price, and thus, a small change in quantity demanded and supplied.

Suggested Citation

  • Sayeh Shojaeinia, 2023. "Metal market analysis: an empirical model for copper supply and demand in US market," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 36(3), pages 509-517, September.
    • Handle: RePEc:spr:minecn:v:36:y:2023:i:3:d:10.1007_s13563-023-00371-5
    DOI: 10.1007/s13563-023-00371-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13563-023-00371-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13563-023-00371-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hu, S. David & Zandi, Iraj, 1980. "Copper econometric models," Engineering Costs and Production Economics, Elsevier, vol. 5(1), pages 53-70, June.
    2. Stuermer, Martin, 2017. "Industrialization and the demand for mineral commodities," Journal of International Money and Finance, Elsevier, vol. 76(C), pages 16-27.
    3. David L. McNicol, 1975. "The Two Price Systems in the Copper Industry," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 50-73, Spring.
    4. F. M. Fisher & P. H. Cootner, 1971. "An Econometric Model of the World Copper Industry," Working papers 70, Massachusetts Institute of Technology (MIT), Department of Economics.
    5. James G. MacKinnon & Nancy D. Olewiler, 1980. "Disequilibrium Estimation of the Demand for Copper," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 197-211, Spring.
    6. Raymond S. Hartman & Kirkor Bozdogan & Ravindra M. Nadkarni, 1979. "The Economic Impacts of Environmental Regulations on the U.S. Copper Industry," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 589-618, Autumn.
    7. Foley, Patricia & Clark, Joel, 1981. "US copper supply : An economic/engineering analysis of cost--supply relationships," Resources Policy, Elsevier, vol. 7(3), pages 171-187, September.
    8. Gomez, Fernando & Guzman, Juan Ignacio & Tilton, John E., 2007. "Copper recycling and scrap availability," Resources Policy, Elsevier, vol. 32(4), pages 183-190, December.
    9. Margaret E. Slade, 1996. "Uniform Compliance Costs for Mineral Commodities: Who Gains and Who Loses?," Land Economics, University of Wisconsin Press, vol. 72(1), pages 17-32.
    10. Walter N. Thurman, 1988. "Speculative Carryover: An Empirical Examination of the U.S. Refined Copper Market," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 420-437, Autumn.
    11. Slade, Margaret E., 1980. "An econometric model of the U.S. secondary copper industry: Recycling versus disposal," Journal of Environmental Economics and Management, Elsevier, vol. 7(2), pages 123-141, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thibault Fally & James Sayre, 2018. "Commodity Trade Matters," 2018 Meeting Papers 172, Society for Economic Dynamics.
    2. Rivera, Nilza & Guzmán, Juan Ignacio & Jara, José Joaquín & Lagos, Gustavo, 2021. "Evaluation of econometric models of secondary refined copper supply," Resources Policy, Elsevier, vol. 73(C).
    3. Gustavo Lagos & David Peters & Marcos Lima & José Joaquín Jara, 2020. "Potential copper production through 2035 in Chile," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 33(1), pages 43-56, July.
    4. Blomberg, Jerry & Söderholm, Patrik, 2009. "The economics of secondary aluminium supply: An econometric analysis based on European data," Resources, Conservation & Recycling, Elsevier, vol. 53(8), pages 455-463.
    5. Sourabh, Shalinee & Pavithran, Sagar & Menon, Balagopal G. & Mahanty, Biswajit, 2023. "Econometric modeling for the influence of economic variables on secondary copper production in India," Resources Policy, Elsevier, vol. 86(PB).
    6. Florian Fizaine, 2019. "The Economics of Recycling Rate: new insights from a Waste Electrical and Electronic Equipment," Policy Papers 2019.01, FAERE - French Association of Environmental and Resource Economists.
    7. Nilza Rivera & Juan Ignacio Guzmán, 2024. "Dynamic relationship between refined and scrap copper prices," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 37(2), pages 381-392, June.
    8. Nilza Rivera & Juan Ignacio Guzmán & Gustavo Lagos, 2023. "A method to estimate the robustness of the secondary refined copper supply function," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 36(2), pages 255-277, June.
    9. Patrik Söderholm & Tomas Ekvall, 2020. "Metal markets and recycling policies: impacts and challenges," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 33(1), pages 257-272, July.
    10. Francesco Nicolli & Nick Johnstone & Patrik Söderholm, 2012. "Resolving failures in recycling markets: the role of technological innovation," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(3), pages 261-288, July.
    11. Michael Pedersen, 2015. "The Impact of Commodity Price Shocks in a Major Producing Economy. The Case of Copper and Chile," Working Papers Central Bank of Chile 753, Central Bank of Chile.
    12. Fizaine, Florian, 2020. "The economics of recycling rate: New insights from waste electrical and electronic equipment," Resources Policy, Elsevier, vol. 67(C).
    13. R. Glenn Hubbard & Robert J. Weiner, 1985. "Nominal Contracting and Price Flexibility in Product Markets," NBER Working Papers 1738, National Bureau of Economic Research, Inc.
    14. Jacks, David S. & Stuermer, Martin, 2020. "What drives commodity price booms and busts?," Energy Economics, Elsevier, vol. 85(C).
    15. Friedrich-Wilhelm Wellmer & Roland W. Scholz, 2018. "What Is the Optimal and Sustainable Lifetime of a Mine?," Sustainability, MDPI, vol. 10(2), pages 1-22, February.
    16. Figuerola-Ferretti, Isabel & Gilbert, Christopher L., 2001. "Price variability and marketing method in non-ferrous metals: : Slade's analysis revisited," Resources Policy, Elsevier, vol. 27(3), pages 169-177, September.
    17. Karan Bhuwalka & Randolph E. Kirchain & Elsa A. Olivetti & Richard Roth, 2023. "Quantifying the drivers of long‐term prices in materials supply chains," Journal of Industrial Ecology, Yale University, vol. 27(1), pages 141-154, February.
    18. Baffes,John & Kabundi,Alain Ntumba & Nagle,Peter Stephen Oliver & Ohnsorge,Franziska Lieselotte, 2018. "The role of major emerging markets in global commodity demand," Policy Research Working Paper Series 8495, The World Bank.
    19. Blomberg, Jerry & Hellmer, Stefan, 2000. "Short-run demand and supply elasticities in the West European market for secondary aluminium," Resources Policy, Elsevier, vol. 26(1), pages 39-50, March.
    20. Fernandez, Viviana & Pastén-Henríquez, Boris & Tapia-Griñen, Pablo & Wagner, Rodrigo, 2023. "Commodity prices under the threat of operational disruptions: Labor strikes at copper mines," Journal of Commodity Markets, Elsevier, vol. 32(C).

    More about this item

    Keywords

    Copper; Demand and supply; Price elasticity; Instrumental variable;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:minecn:v:36:y:2023:i:3:d:10.1007_s13563-023-00371-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.