The effect of macroeconomic determinants of the Chinese economy on the copper price movements

Abstract

The main goal of this work is to identify and analyze the impact of the Chinese economy key determinants on the global market copper price movements. Our research is based on a multilinear regression analysis of the historical data of the time period from 2003 until 2017. The presented multilinear regression model constitutes the 4 (four) statistically most significant macroeconomic variables, that is, determinants of the Chinese economy, which are used for clarifying current trends and can predict the future movements of prices on the global copper market. Statistically significant determinants are the inflation in China, the Chinese export of goods and services, Chinese import of copper, and consumption of refined copper in China. Obtained results of the research show a dominant role of the demand factor and significant influence of the Chinese economy on the movements of the global copper price. At the same time, the results imply that movements of the copper price on the global market can be an indicator of the economic activities slowing down or speeding up, in the countries which are the major traders of this metal.

Keywords

• copper spot price
• chinese economy
• macroeconomic factors
• multiple linear regression