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Broadening the statistical search for metal price super cycles to steel and related metals

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  • Jerrett, Daniel
  • Cuddington, John T.

Abstract

During the past five years, industry analysts have proclaimed that metal prices are in the early phase of a 'super cycle,' driven primarily by Chinese industrial expansion. Academic economists have generally been very skeptical about the presence of long cycles. A time-series econometric analysis by Cuddington and Jerrett [2008. Super cycles in real metals prices? IMF Staff Pap. 55(4), in press], however, has used band-pass filtering techniques to isolate super cycles in the prices of six metals traded on the London Metal Exchange (the 'LME6'). This paper extends the search for super-cycle behavior to three additional metal products that are critical in the early phases of industrial development and urbanization: steel, pig iron, and molybdenum (a key ingredient in many steel alloys). There is strong evidence of super cycles in these three metals, although their timing differs to some extent from the super cycles found for the LME6.

Suggested Citation

  • Jerrett, Daniel & Cuddington, John T., 2008. "Broadening the statistical search for metal price super cycles to steel and related metals," Resources Policy, Elsevier, vol. 33(4), pages 188-195, December.
  • Handle: RePEc:eee:jrpoli:v:33:y:2008:i:4:p:188-195
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    References listed on IDEAS

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    Cited by:

    1. Kagraoka, Yusho, 2016. "Common dynamic factors in driving commodity prices: Implications of a generalized dynamic factor model," Economic Modelling, Elsevier, vol. 52(PB), pages 609-617.
    2. Chen, Peng, 2015. "Global oil prices, macroeconomic fundamentals and China's commodity sector comovements," Energy Policy, Elsevier, vol. 87(C), pages 284-294.
    3. John Baffes, 2014. "Global Economic Prospects : Commodity Markets Outlook, October 2014," World Bank Publications, The World Bank, number 20455.
    4. Rossen, Anja, 2015. "What are metal prices like? Co-movement, price cycles and long-run trends," Resources Policy, Elsevier, pages 255-276.
    5. David Matesanz & Benno Torgler & Germán Dabat & Guillermo J. Ortega, 2014. "Co-movements in commodity prices: a note based on network analysis," Agricultural Economics, International Association of Agricultural Economists, pages 13-21.
    6. Arturo L. Vásquez Cordano & Abdel M. Zellou, 2016. "Where are natural gas prices heading, and what are the environmental consequences for Latin America?," Working Papers 2016-71, Peruvian Economic Association.
    7. Abdel M. Zellou & John T. Cuddington, 2012. "Trends and Super Cycles in Crude Oil and Coal Prices," Working Papers 2012-10, Colorado School of Mines, Division of Economics and Business.
    8. Issler, João Victor & Rodrigues, Claudia & Burjack, Rafael, 2014. "Using common features to understand the behavior of metal-commodity prices and forecast them at different horizons," Journal of International Money and Finance, Elsevier, vol. 42(C), pages 310-335.
    9. Byrne, Joseph P. & Fazio, Giorgio & Fiess, Norbert, 2013. "Primary commodity prices: Co-movements, common factors and fundamentals," Journal of Development Economics, Elsevier, pages 16-26.
    10. repec:fgv:epgewp:736 is not listed on IDEAS
    11. He, Kaijian & Lu, Xingjing & Zou, Yingchao & Keung Lai, Kin, 2015. "Forecasting metal prices with a curvelet based multiscale methodology," Resources Policy, Elsevier, pages 144-150.
    12. David S. Jacks, 2013. "From Boom to Bust: A Typology of Real Commodity Prices in the Long Run," CEH Discussion Papers 013, Centre for Economic History, Research School of Economics, Australian National University.
    13. Cuddington, John T. & Zellou, Abdel M., 2013. "A simple mineral market model: Can it produce super cycles in prices?," Resources Policy, Elsevier, pages 75-87.
    14. Rossen, Anja, 2014. "What are metal prices like? Co-movement, price cycles and long-run trends," HWWI Research Papers 155, Hamburg Institute of International Economics (HWWI).
    15. Fernandez, Viviana, 2015. "Commodity price excess co-movement from a historical perspective: 1900–2010," Energy Economics, Elsevier, vol. 49(C), pages 698-710.
    16. Byrne, Joseph P & Fazio, Giorgio & Fiess, Norbert, 2010. "Optimism and commitment: An elementary theory of bargaining and war," SIRE Discussion Papers 2010-102, Scottish Institute for Research in Economics (SIRE).
    17. Christina Boll & Julian Sebastian Leppin & Klaus Schömann, 2014. "Who Is Overeducated and Why?: Probit and Dynamic Mixed Multinomial Logit Analyses of Vertical Mismatch in East and West Germany," SOEPpapers on Multidisciplinary Panel Data Research 661, DIW Berlin, The German Socio-Economic Panel (SOEP).
    18. Roberts, Mark C., 2009. "Duration and characteristics of metal price cycles," Resources Policy, Elsevier, vol. 34(3), pages 87-102, September.
    19. Chen, Yanhui & He, Kaijian & Zhang, Chuan, 2016. "A novel grey wave forecasting method for predicting metal prices," Resources Policy, Elsevier, pages 323-331.
    20. Fomin, M., 2016. "Business cycles and acquisition policy: Analysis of M&A deals of metallurgical companies," Working Papers 6441, Graduate School of Management, St. Petersburg State University.
    21. Cuddington, John T. & Zellou, Abdel M., 2013. "A simple mineral market model: Can it produce super cycles in prices?," Resources Policy, Elsevier, pages 75-87.

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