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

Sayeh Shojaeinia ()
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Sayeh Shojaeinia: Colorado School of Mines

Mineral Economics, 2023, vol. 36, issue 3, No 10, 509-517

Abstract: 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.

Keywords: Copper; Demand and supply; Price elasticity; Instrumental variable (search for similar items in EconPapers)
JEL-codes: C22 C51 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s13563-023-00371-5

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