Solution To Supply-demand Model Losing Effectiveness In Asphalt Future Market

Asphalt future,given birth in Shanghai Future Exchange in the year of 2013,was known as the only one asphalt future in the world.In the second half of 2015,financialization became remarkable in the asphalt market: the changes of participants in future markets,the rapid increase of trading volume and open interest volume,the correlation of commodity markets and traditional market.The existence of commodity market financialization change the way of future price fixing,the price bases on not only supply and demand,but also commodity market financial factors.Therefore,the traditional supply-demand model cannot expound the price precisely.Accordingly,this paper proposes amendments in the traditional supply demand model,bring new financial factors into price fixing model,as a result,the model becomes more practical.Firstly,the paper reviews the pricing theories and supply demand theories,besides this paper sorts out the influence and phenomenon of commodity market financialization.By investing the fundamentals of asphalt market,the theoretical price in the balance market can be found.Comparing the theoretical price and real price,the paper finds that traditional supply demand model cannot expound the real price precisely.Considering financial factors,the paper update the traditional supply demand model.Moreover,the paper examines the new model,finds that money delivery,volatility spillover effects in stock market and confidence of investors have a significant impact in asphalt market.Finally the paper finds the asphalt price expression formula.At last,this paper draws the conclusion that the price of asphalt bases on currency,stock market and confidence of investors.The paper also makes a suggestion to investors and regulators and arbitrage behaviors.