Copper Market Research Articles

SoS ‐ Global Solutions to Global Problems Using UAF

AbstractThis paper applies Unified Architecture Framework (UAF) to a case study which defines the global copper market as an enterprise comprising a diverse set of stakeholders and independently operating businesses and industries, with the goal to understand how they might evaluate, execute, or modify their behaviors in response to the diminishing global copper supply. Specifically, we sought to determine if the framework viewpoints, modeling language, and workflow guidance provided in the UAF specification could support the analysis. In a true System of Systems (SoS), the solution (or any improvement) relies on the cooperation of a multitude of independent and unrelated businesses and industries. Several viewpoints of UAF were evaluated to model the SoS, which reveal how certain entities may be motivated to implement solutions, and how those decisions may impact others within the SoS. We also provide observations from the analysis which may serve to improve the utility of UAF in other applications.

Asymmetric Effects of Oil Price Volatility on Government Expenditure in Oil-Importing African Countries: Evidence from Zambia

This paper examines the impact of disaggregated oil price shocks the government expenditure in oil-importing African countries using the case of Zambia. The analysis utilizes a“Structural Vector Autoregressive (SVAR) Model” to evaluate the short-run effects, while a “Vector Error Correction Model (VECM) is employed to analyze the relationship over the long-run. Results of the short-run analysis reveal a notable positive influence of oil price shocks”on government expenditure that emanates from global aggregate and precautionary demand factors. The aforementioned results are clarified by the effects that increased global aggregate demand has on copper priсes, which in turn influences government revenue derived from taxes. Additionally, the transmission of “financial contagion and volatility spillovers” from the οil to the copper market clarifies the influence of precautionary demand on government expenditure. The findings obtained from the VECM indicate that global aggregate demand has positive effects on public sector spending in the long run. Additionally, the analysis demonstrates that the rate at which public sector spending recovers to its equilibrium level after a temporary deviation is both monotonic and statistically significant. Moreover, among the three categories of οil priсe hikes, Forecast Error Variance Decomposition analysis reveals that shocks related to precautionary demand have the most significant impact, accounting for 11.7% of the observed variation in public sector spending.

Research on the Copper Futures Market in China

This paper examines the role of copper futures in China's financial market, listed in the Shanghai Futures Exchange (SHFE) in 1991 as the first nonferrous metal futures commodity. Today, it is one of the well-developed and mature futures contracts in the Chinese commodity futures market. We analyze the current situation of the Chinese copper market, both spot and futures, along with the role of hedging with copper futures in the whole copper industry chain and the role of copper futures in the spot market. The results show that hedging with copper futures is significant for metal enterprises from all parts of the copper industry chain as an essential tool to offset price risks and for stable development; it also optimizes resource allocation in the economy and improves the efficiency of Chinese metal enterprises.

Research on the Prediction of Copper Consumption and Recycling Changes in China under the Background of Carbon Neutrality

This paper examines the recent development of China's copper industry in the context of "carbon neutrality." The issues of low resource self-sufficiency rate increased equipment levels, and limited industry discourse power in the global copper market are addressed in a number of different ways. Finally, based on the foregoing analysis, this study concludes that in order to achieve maximum resource utilization efficiency and carbon emission reduction, China's copper industry needs to strengthen technological innovation and cooperation, promote the development of the circular economy, and strengthen its synergy with other industries. The government should also create pertinent regulations and laws to encourage and direct businesses to devote more time and resources to recycling.

Identifying price bubbles in copper market: Evidence from a GSADF test approach.

This paper uses the test proposed by Generalized Supremum Augmented Dickey-Fuller to identify whether there are multiple bubbles in copper price. The empirical results show that base on market fundamentals, there are seven bubbles existed from January 1980 to March 2023. Through analyses, the first two bubbles can be explained by the demand from Japan by the industry concentration and persistent supply constraint. The third to sixth bubbles are mainly negatively impacted by the global financial crisis and growing demand of China. The last bubble is caused by the economic recovery from Covid-19. The logit regression has stated that aluminum price, copper production, all metals index and GDP have a positive impact on copper bubbles, while China's copper imports and precious metals price negatively explains copper bubbles. The main contributions are the investigation of the copper price bubbles, its determinants and the different technique of GSADF to detect copper price bubbles. Furthermore, it provides helpful information for those investors to make reasonable investment decisions and thus, avoid potential price risk.

Conservation of Urban Heritage Landscapes: Lessons from Souq AlSaffarin in Baghdad, Iraq

For centuries, traditional bazaars, or Souqs have been integral to urban life and the economic landscapes of Arabic-Islamic regions. The tangible and intangible heritage that shapes the identity of a place and contributes to its economy is essential to the functioning of these bazaars. With appropriate spatial configurations, they could foster creative industries, handcrafts, and customs, which can generate new services, create jobs, diversify a city’s economic distribution and promote small businesses. This paper explores Souq alsaffarin, which is also known as the copper market in old Rusafa in Baghdad. It is a heritage urban landscape and has a role in shaping the sense of place in this area. It has been subject to many socio-economic and political events that have influenced the importance and character of its profession, in terms of production and selling. It is a landmark of Baghdad that has maintained its position despite difficulties. The distinctive handicrafts produced and their relationships with people’s social practices highlight their impact on tourism and their role as an economic source for the region. They provide economic permanence that helps to develop the historical core of the city, preserve its historical identity, and promote cultural tourism. However, the market faces a significant problem of declining numbers of shopkeepers and craftsmen, which threatens the continuation of its local small businesses. This research examines this issue. It employs site observations, questionnaires, and interviews with craftsmen and shop owners who still run the market, as a research methodology. SWOT analysis is employed to identify the best solutions to develop the souq and preserve its identity. The paper concludes that the significance of Souq Alsaffarin lies in its deep connection to the rich history and culture, which defines the identity and heritage of the community. Thus, it argues that preservation and conservation are essential. This requires an approach that considers both tangible and intangible aspects of the souq, engaging the local community, and promoting sustainable practices, so that this souq can thrive as a living testament to its rich history and culture.

Efficiency of Enterprises in Conditions of Instability of the World Market (by the Example of Mining and Processing Plant “Erdenet”)

The research analyzed the effectiveness of the activity of the mining and industrial complex «Erdenet» at the present stage. The problems of transforming the mining and industrial complex «Erdenet» into an open joint-stock company and the advantages and disadvantages of this process are considered. The authors emphasize how relevant and necessary for study and analysis is the issue of increasing the efficiency of industrial enterprises at the present stage, especially in those conditions when the mining industry of Mongolia is successfully developing, and competition in the world market is intensifying. The instability of the world market of raw mineral resources, the growth of their consumption in the Asian market, the global financial crisis dictate the need to study the optimization of mining enterprises. It becomes important not only to study the world copper market, but also to study ways to reduce future price risks, increase the stability of the financial condition of mining companies. In the article, the authors consider the problems of transforming the Erdenet GOK into an open joint-stock company, the need to introduce hedging, and suggest specific directions for improving the efficiency of enterprises.

The relevance of Thirlwall’s growth law in the Zambian economy

AbstractThis paper uses a blended methodology—conventional tests of ‘Thirlwall's law’ combined with an in‐depth growth narrative approach and unit root tests—to identify the dominant balance‐of‐payments adjustment mechanism in the Zambian economy over the period 1956–2017. Consistent with Thirlwall's growth law, the main results identify income changes as the dominant balance‐of‐payments adjustment mechanism, rather than relative price changes. The three‐regime export demand function further reflects the vulnerability of the Zambian economy to unexpected busts in the world copper market, and highlights the need for effective industrial policies to create a more diversified economy into higher value‐added manufactures. The analysis also demonstrates that the results are robust to some of the main criticisms that have been levelled against Thirlwall's original growth law.

Machines in the Hands of Capitalists: Power and Profit in Late Eighteenth-Century Cornish Copper Mines

Abstract In the inaugural issue of Past and Present, Eric Hobsbawm cautioned historians against the assumption that a capitalist economy has an inherent tendency to cost-saving and technological innovation, emphasizing that ‘It has a bias only towards profit’. Inspired by Hobsbawm, this article shows how a history of profit can elucidate the economic and social history of machines. Beginning with miners’ protests at the stoppage of Boulton & Watt steam engines in Cornish copper mines in the late 1780s, it shows that these engines’ implications for the people who invested in, and worked, the mines were conditioned by a complex relationship between profit and power: mechanical power, which was crucial to the mining of copper and the costs of its production; imperial power, given fluctuating demand for copper from different parts of the British empire; and market power, since control over price setting on the British copper market was crucial for Cornish mining profits. Understanding what determined mines’ profits helps to account for capitalists’ decisions to stop their engines as well as copper miners’ protests at their actions. More generally, it suggests the potential of studying the economic and social history of new machines through the lens of profit.

АНАЛИЗ РЫНКА ПРОДАЖ МЕДИ В РОССИИ И КОНКУРЕНТНЫХ ОТНОШЕНИЙ В ЭТОЙ СФЕРЕ

Today, copper is of key importance for the development of both the global economic system and the economy of the Russian Federation, its importance is increasing every day. Decarbonization is one of the global projects involving the use of copper, where copper plays a key role. Copper is involved in the production of electric vehicles, wind turbines, and other technical means and devices used in «green» energy. Russia is a leader in the copper market, however, factors of a predominantly foreign political nature may have an impact on its turnover in the near future. The article is devoted to the analysis of indicators of copper sales in Russia and on the world stage, and also considers the main competitive relations in this area. Prospects for the development of the copper market, including forecasts of the price level presented by leading analytical agencies, are also considered.

ИССЛЕДОВАНИЕ ДИНАМИКИ ПРОИЗВОДСТВА И ПОТРЕБЛЕНИЯ МЕДИ В МИРЕ

The scientific article is devoted to the study of the dynamics of copper production and consumption in the world. In the course of the study, an analysis of the reserves of this material is presented. Special attention is paid to the forecast of the global use of refined copper, price dynamics, as well as the structure of copper consumption by regions of the world. Possible scenarios of balancing the copper market in the foreseeable future, taking into account the development of new industries, are considered. Special emphasis is placed on the plans of the largest copper producers, including Russia.

Non-renewable resource extraction over the long term: empirical evidence from global copper production

Global mine production of copper has risen more than 80 times over the last 135 years. What were the main drivers? I examine this question based on copper market data from 1880 to 2020. I employ a structural time series model with sign restrictions to identify demand and supply shocks. I find that a deterministic trend drives most of the output growth. At the same time, unpredictable demand and supply shocks caused substantial fluctuations around the trend. A global commodity demand shock that is, for example, linked to a 3% unexpected expansion of the global economy due to rapid industrialization causes a 10% rise in the real copper price, incentivizing a 5% increase in global copper production. This provides empirical evidence for the feedback control cycle of mineral supply.

Informational linkage and price discovery between China's futures and spot markets: Evidence from the US–China trade dispute

This study examines the effects of the US–China trade dispute on the informational linkages and price discovery between China's futures and spot markets. Using the daily price data of four assets representing the real and financial sectors in China during 2016–2019, empirical findings suggest that the futures–spot correlations for the stock index, copper, and corn markets have increased significantly during the trade dispute. In contrast, sharp declines in the dynamic correlations between gold futures and spot markets, as gold is a safe haven asset, are observed during the event window. During uncertainty disturbance (i.e., the trade dispute), the futures–spot cointegrated relationships in the gold and corn markets are found to adjust more quickly and efficiently, whereas the correction speeds of the market deviations for the stock index and copper market are moderately slower. With the intensive integration of market expectations with uncertainty shocks, the economic shocks of trade disputes tend to remarkably improve the pricing efficiency of China's futures markets, except for the gold futures market. China's spot markets, however, seem to be more sensitive to the noise trades and information disturbances arising from the trade dispute.

High-frequency volatility connectedness and time-frequency correlation among Chinese stock and major commodity markets around COVID-19

This study examines the connectedness and time-frequency correlation of price volatility across the Chinese stock market and major commodity markets. This paper applies a DCC-GARCH-based volatility connectedness model and the cross-wavelet transform to examine the transmission of risk patterns in these markets before and during the COVID-19 outbreak, as well as the leading lag relationship and synergistic movements between different time domains. First, the findings of the DCC-GARCH connectedness model show dynamic total spillovers are stronger after the COVID-19 outbreak. Chinese stocks and corn have been net spillovers in the system throughout the sample period, but the Chinese market plays the role of a net receiver of volatility relative to other markets (net pairwise directional connectedness) in the system as a whole. In terms of wavelet results, there is some connection to the connectedness results, with all commodity markets, except soybeans and wheat, showing significant dependence on Chinese equities in the medium/long term following the COVID-19 outbreak. Secondly, the medium-to long-term frequency of the crude oil market and copper market are highly dependent on the Chinese stock market, especially after the COVID-19 outbreak. Meanwhile, the copper market is the main source of risk for the Chinese stock market, while the wheat market sends the least shocks to the Chinese stock market. The findings of this paper will have a direct impact on a number of important decisions made by investors and policymakers.

Examining the efficiency and herding behavior of commodity markets using multifractal detrended fluctuation analysis. Empirical evidence from energy, agriculture, and metal markets

We examine the efficiency and herding behavior between four energy markets (Crude, Brent, Gasoline, and Natural gas), five agriculture markets (Corn, Wheat, Soybeans, Cocoa, and Coffee), and three metal markets (Gold, Silver, and Copper) using multifractal detrended fluctuation method. In addition to the full sample, the analysis also uses two most critical sub-periods of GFC 2007-09 and COVID-19 to reveal hidden features and herding patterns of the commodity markets. The results indicate existence of strong multifractality patterns and resultant inefficiency with varied degrees in the commodity markets. We find highest inefficiency in the copper market, followed by silver market. While cocoa remains most efficient commodity market during the entire period of study. In addition, energy markets remain more efficient compared to the rest of the two groups. Furthermore, the results confirm that crises events impact the efficiency of commodity markets significantly, and persistence behavior with a trace of herding is found in some of the markets. Whereas, silver and gold serve as useful hedging instruments during the crises. Our study is useful for risk management, regulatory supervision, and effective decision making for investors related to investments in the commodity markets.

Low-grade chalcopyrite ore, heap leaching or smelting recovery route?

Chalcopyrite, the major mineral source of copper, is commonly treated pyrometallurgically, using froth flotation, smelting, converting and electrorefining processes. The ore treatment however is limited to the cut-off grade concentration below which the extraction is not economically viable. In this study a comparison of feasibility of the pyrometallurgical and hydrometallurgical treatment of low grade (0.23%–0.35% Cu), high content chalcopyrite (>90% CuFeS2) ore were studied from both technical and economic viewpoints. On a technical stance, the results of a pilot test on froth flotation of 100 t of low-grade ore are presented. The pilot test results confirm the generation of a Cu concentrate of a grade range 23.3–19.6% Cu with a copper recovery in the range 90.9–78.1%. For the hydrometallurgical treatment, bio heap leaching of 40,000 t of low-grade ore using agglomeration and aeration was proven to achieve a copper recovery of 32.6% for the chalcopyrite portion of the ore over 326 days of operation.On the economic side, the operating cost of the process per tonne of copper cathode for both processes were reported. The operating cost for the pyrometallurgical (PM) processing plant was calculated to be 1.4 times less than the hydrometallurgical (HM) processing plant. The sales revenue of the PM route was also higher than that of the HM route due to the byproducts credit. Capital cost estimates were made assuming that the current solvent extraction/electrowinning (SX/EW) facilities in a HM route and the current smelting and electrorefining plants in the PM route have enough free capacity to absorb the upstream outputs. Applying the copper extraction efficiencies of the pilot plants, the profitability indicators for both routes in treatment of 3000,000 t ore/year was studied. The impact of the interest rate was found significant in economic preference of the HM route over the PM route. This is due to the high capital cost of the mineral processing plant despite of the higher operating cost of the HM plant. The capital cost of the mineral processing plant can make the HM route feasible at interest rates higher than 27.5%. At discount rates lower than 27.5%, the PM route process is viable over the HM route at copper market price of US$9500/t. A drop in copper selling price to US$6000/t acts in favor of the HM route, making it feasible at interest rates higher than 22.4%. For a general scenario where the construction of SX/EW and smelter/refinery plants are required, the discount rate at which the net present value (NPV) of the two routes are equal has decreased from 27.5% to 17%. In this scenario, for discount rates higher than 17%, the HM route with 31% total copper recovery is more feasible than the PM route with 79% recovery.

Salud ocupacional en trabajadores mineros del cobre en Chile:una revisión exploratoria de literatura (2008-2019)

Introduction: the present article presents the results of a literature review on the health of mine workers on the Chilean copper market. Objective: To depict the evidence produced regarding the diseases that affect the health of Chilean mine workers.Method: A scoping review, indexed on scientific journals and other sources, for the 2008-2019 period, centered on the analysis of 20 documents that reported empirical results. Results: The main physical conditions of copper mine workers were found to be problems related to high-altitude work, the inhalation of silica dust, and noise exposure; eating and musculoskeletal disorders, cardiovascular and respiratory disorders, accidents, and low back pain. Regarding mental health conditions, the following were highlighted: psychologi-cal demands, the impact on the sleep quality due to shift work, fatigue, anxiety, depression, violence on subcontractors, and worsening of life standards after relocation, due to silicosis.Discussion: working in copper mine impacts the global health of workers, increasing the exposure to health conditions that increases the sense of suffering and worsens their qua-lity of life.

Fundamentals vs. Financialization during Extreme Events: From Backwardation to Contango, a Copper Market Analysis during the COVID-19 Pandemic

The COVID-19 pandemic has shocked commodities markets in general and base metals markets in particular. The market turmoil made it very difficult to act in the physical market, given the impossibility of establishing or maintaining physical and/or financial positions in a context of high uncertainty. This has happened both in different moments of the development of the pandemic and in geographically different frames. That is why this contribution tries to explain the evolution of warehouses and copper price structure and its utility for hedging in the context of an extreme event. To that end, Granger causality has been used to test whether, during the COVID-19 first wave, the pandemic evolution is cointegrated on one hand with copper futures price structure and, on the other, with the incremental levels of copper stocks. Using 102 official copper prices on London Metal Exchange (LME) trading days, between 13 January 2020 and 5 June 2020 (once the most severe effects of the first wave had been overcome), it was demonstrated that, during the first COVID-19 wave in Europe, the weekly death index variation was cointegrated with the copper future price structure. It has been proven that, in this timelapse, contango in futures price structure has increased its value, and the incremental levels of stock in copper LME warehouses are linked with a stable contango structure. In short, we find that fundamental market effects predominate, in a context in which commodities used to be more financialized. This leads market players, such as traders, miners, and transformers, to move exposures in their hedging structures, under such extreme event situations, in favor of or against either contango or backwardation, so as to derive value from them.

Evidence of arbitrage trading activity: The case of Chinese metal futures contracts

Several unique insights are documented based on a study of selected metal futures contracts traded in the U.S. and China. Based on our unique measures, we present intra market evidence that the U.S. gold and silver futures markets reflect a fully arbitraged market and U.S. copper nearly so. In contrast, the Chinese gold and silver futures markets appear to reflect an un-arbitraged market whereas the Chinese copper market is characterized as somewhat arbitraged. We explore various reasons for this evidence as well as document the differences in gold, silver, and copper futures markets between China and the U.S.

Impact of the Green Deal on copper imports from Russia to the EU

The article analyzes the prospects for copper imports from the Russian Federation to the EU in the context of the implementation of the plan for decarbonization of the EU economy by 2050. It is noted that green economy is more metal-intensive, but in the medium-run, the impact of the traditional drivers (population growth and rising welfare) on the global copper market will remain significant. Similar trends are shown in the EU copper market: in the current decade, the rapid relative growth of the green sectors of the economy and the demand for copper from them will not lead to fundamental changes in the dynamics and structure of the market. At the same time, the introduction of a cross-border carbon adjustment mechanism (CBAM) could disrupt the sustainability of the established business model in the European copper industry. Eight scenarios of the financial burden for copper imports from the Russian Federation to the EU after the introduction of CBAM are presented, showing that the new EU foreign trade instrument will not have a restrictive effect on copper imports from the Russian Federation. However, the increase in the supply of Russian copper to the growing EU market may be constrained by the geographic remoteness of new copper mining and refining facilities.