Direct Effect of TC on the LME Copper Prices
The motivation of this paper is to identify the effect of treatment charge (TC) on LME (London Metal Exchange) copper prices. It is a fundamental variable as a supply side factor, because it is related to the smelting process and reflects the level of concentrates market tightness. To examine this q...
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| Format: | Article |
| Language: | English |
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MDPI AG
2020-05-01
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| Series: | Economies |
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| Online Access: | https://www.mdpi.com/2227-7099/8/2/36 |
| _version_ | 1797568585558654976 |
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| author | Byungkwon Lim Hyeon Sook Kim Jaehwan Park |
| author_facet | Byungkwon Lim Hyeon Sook Kim Jaehwan Park |
| author_sort | Byungkwon Lim |
| collection | DOAJ |
| description | The motivation of this paper is to identify the effect of treatment charge (TC) on LME (London Metal Exchange) copper prices. It is a fundamental variable as a supply side factor, because it is related to the smelting process and reflects the level of concentrates market tightness. To examine this question carefully, the regression model is applied. This paper finds a statistically significant negative link between TC and LME copper prices. It is found that a 10% increase in TC of copper decreases in copper return by 1.8%. Subsequently, the vector autoregression (VAR) model is introduced to consider the impact of TC to copper prices as a permanent effect. It is found that the negative impact of the TC to copper returns dies out quickly. The statistical estimation in this article will provide a good reference for future study. |
| first_indexed | 2024-03-10T19:59:02Z |
| format | Article |
| id | doaj.art-0df033560f354204a77c4f54e7c18908 |
| institution | Directory Open Access Journal |
| issn | 2227-7099 |
| language | English |
| last_indexed | 2024-03-10T19:59:02Z |
| publishDate | 2020-05-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj.art-0df033560f354204a77c4f54e7c189082023-11-19T23:42:19ZengMDPI AGEconomies2227-70992020-05-01823610.3390/economies8020036Direct Effect of TC on the LME Copper PricesByungkwon Lim0Hyeon Sook Kim1Jaehwan Park2Korea Housing Finance Corporation, Pusan 48400, KoreaPublic Procurement Service, Daejeon 35208, KoreaPublic Procurement Service, Daejeon 35208, KoreaThe motivation of this paper is to identify the effect of treatment charge (TC) on LME (London Metal Exchange) copper prices. It is a fundamental variable as a supply side factor, because it is related to the smelting process and reflects the level of concentrates market tightness. To examine this question carefully, the regression model is applied. This paper finds a statistically significant negative link between TC and LME copper prices. It is found that a 10% increase in TC of copper decreases in copper return by 1.8%. Subsequently, the vector autoregression (VAR) model is introduced to consider the impact of TC to copper prices as a permanent effect. It is found that the negative impact of the TC to copper returns dies out quickly. The statistical estimation in this article will provide a good reference for future study.https://www.mdpi.com/2227-7099/8/2/36<title>Keywords</title>copper spot pricetreatment chargeimpulse responsespeculation<title>JEL Classification</title> |
| spellingShingle | Byungkwon Lim Hyeon Sook Kim Jaehwan Park Direct Effect of TC on the LME Copper Prices Economies <title>Keywords</title> copper spot price treatment charge impulse response speculation <title>JEL Classification</title> |
| title | Direct Effect of TC on the LME Copper Prices |
| title_full | Direct Effect of TC on the LME Copper Prices |
| title_fullStr | Direct Effect of TC on the LME Copper Prices |
| title_full_unstemmed | Direct Effect of TC on the LME Copper Prices |
| title_short | Direct Effect of TC on the LME Copper Prices |
| title_sort | direct effect of tc on the lme copper prices |
| topic | <title>Keywords</title> copper spot price treatment charge impulse response speculation <title>JEL Classification</title> |
| url | https://www.mdpi.com/2227-7099/8/2/36 |
| work_keys_str_mv | AT byungkwonlim directeffectoftconthelmecopperprices AT hyeonsookkim directeffectoftconthelmecopperprices AT jaehwanpark directeffectoftconthelmecopperprices |