Macro and micro factors on global copper pricing: a historical data analysis

Ernanto (), Sudarso Kaderi Wiryono () and Taufik Faturohman ()
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Ernanto: School of Business and Management - Institut Teknologi
Sudarso Kaderi Wiryono: School of Business and Management - Institut Teknologi
Taufik Faturohman: School of Business and Management - Institut Teknologi

Mineral Economics, 2025, vol. 38, issue 4, No 5, 845-867

Abstract: Abstract This paper examines the key determinants of copper prices, focusing on economic drivers, market-specific dynamics, and volatility. It aims to enhance understanding of copper price influences to aid macroeconomic forecasting and policy-making in copper-dependent economies. Using VECM to identify short- and long-term dynamics and EGARCH to analyze volatility patterns, the study also employs Monte Carlo simulation to predict future outcomes and assess risks. Data from 1992 to 2023 from global markets and macroeconomic sources illustrate copper pricing mechanisms. Copper prices are influenced significantly by past values, economic indicators like hedging prices, and inventory levels. The EGARCH model shows strong persistence in volatility with minimal asymmetry between market news. Monte Carlo simulation highlights potential future price fluctuations and their impacts. This study offers new insights into the unique volatility and price determination in the copper market, contrasting with financial assets. The Monte Carlo analysis adds robustness, aiding stakeholders in making informed decisions amid price unpredictability.

Keywords: Copper prices; Global economic indicators; Vector Error Correction Model (VECM); Exponential Generalized Autoregressive Conditional Heteroskedasticity (EGARCH); Monte carlo simulation; Market volatility (search for similar items in EconPapers)
JEL-codes: C32 E37 G13 Q02 Q31 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13563-025-00505-x

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