The impact of international price shocks on China's nonferrous metal companies: A case study of copper

Copper is one of the most important nonferrous metals for modern society, which should be utilized in a sustainable way because of its non-renewable nature. This paper addresses the relationship between price shocks from the international copper market and China's listed copper companies. International copper market price shocks are disentangled into supply shocks, aggregate demand shocks, and specific demand shocks using the structural vector autoregression method. Then, the asymmetric impact of those shocks on the stock prices of China's listed copper companies is examined. The results indicate that demand shocks are the dominant factor influencing copper price fluctuations, with their impact on stock prices being significantly higher than those of supply shocks. In the long run, supply shocks and demand shocks both have significant asymmetric impacts on stock prices, while in the short run, specific demand shocks have an asymmetric impact on stock prices.