Ziyuan Kexue (Apr 2023)
Transmission mechanism and effect of international nonferrous metal price fluctuation to China’s industrial chain:Based on a two-layer complex network model
Abstract
[Objective] The objective of this study was to reveal the transmission mechanism of international nonferrous metal price fluctuation to China’s industrial chain from the perspective of complex system, which has important practical significance for preventing the further accumulation of economic risks. [Methods] Based on the supply cost-driven perspective, the transmission process of international nonferrous metal price fluctuation was analyzed, and a two-layer complex network model with 1-4 lags was constructed. The spatial transmission process of nonferrous metal futures market was connected with the vertical transmission process of the industrial chain, and the transmission effect of nonferrous metal price fluctuation on the industrial chain was calculated. [Results] (1) The price fluctuation of international nonferrous metal futures can be transmitted to most downstream industries of the industrial chain of China in a short time. (2) In the transmission process of price fluctuation, the key futures types or key industries of nonferrous metals that play the volatility spillover and mediation roles will change in the early and late stages. (3) When the price of nonferrous metals rises by 10%, price in the midstream industry will rise, while price in the downstream industry will fall. There has been a price block between upstream and downstream industries, and the cost pressure in upstream industry has not been effectively released. [Conclusion] The fluctuation of international nonferrous metal futures prices significantly increases the cost control pressure of nonferrous metal industrial chain related enterprises in China, especially downstream enterprises. Therefore, we should be alert to the import inflation risk caused by the blocked transmission of nonferrous metal prices. It is recommended to implement dynamic supervision on key futures types and key industries of nonferrous metals in the early and late stages when the price of nonferrous metals fluctuates greatly, and to encourage more associated enterprises affected by price fluctuations of nonferrous metals to use futures tools to control costs.
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