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

Author

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  • 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
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    References listed on IDEAS

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    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

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