An Empirical Study On The Influencing Factors Of LME’s Copper Futures Price

With the booming development of economy, China has developed into the main country of copper consumption. However, in recent years, the severe concussion of copper futures market has a significant impact on national economy. Since SHFE’s copper futures is basically in accordance with LME’s copper futures, the analysis of the determinants of LME’s copper futures price and a clear understand of the rule of the price change would be very significant for us to keep national economy and commodity futures market developing healthily.This article started with the theory of commodity futures price, discussed its characteristic and forming mechanism, analyzed the determinants of LME’s copper futures price. Then this paper paid attention to carry on the empirical analyzes to 17 main factors involving global macroeconomic factors, financial factors, supply and demand factors of copper and other factors. Traditional multiple linear regression model has a big problem with the explanation of LME’s copper futures price, the multiple co-linearity among 17 factors causes significant lack of model’s validity. Therefore this paper started with general multiple linear regression, then carry on the empirical analyzes to solve the defects of the former model with stepwise regression model and principal component regression model.