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Open AccessArticle

Direct Effect of TC on the LME Copper Prices

1
Korea Housing Finance Corporation, Pusan 48400, Korea
2
Public Procurement Service, Daejeon 35208, Korea
*
Author to whom correspondence should be addressed.
Economies 2020, 8(2), 36; https://doi.org/10.3390/economies8020036
Received: 23 March 2020 / Revised: 28 April 2020 / Accepted: 4 May 2020 / Published: 7 May 2020
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. View Full-Text
Keywords: Keywords; copper spot price; treatment charge; impulse response; speculation; JEL Classification; C3; G1 Keywords; copper spot price; treatment charge; impulse response; speculation; JEL Classification; C3; G1
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MDPI and ACS Style

Lim, B.; Kim, H.S.; Park, J. Direct Effect of TC on the LME Copper Prices. Economies 2020, 8, 36.

AMA Style

Lim B, Kim HS, Park J. Direct Effect of TC on the LME Copper Prices. Economies. 2020; 8(2):36.

Chicago/Turabian Style

Lim, Byungkwon; Kim, Hyeon S.; Park, Jaehwan. 2020. "Direct Effect of TC on the LME Copper Prices" Economies 8, no. 2: 36.

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