Research On The Linkage Between Shanghai And London Copper Futures Market

With the advancement of modernization and urbanization,China's copper resource demand and external dependency have been continuously improved.The international pricing power of copper is conducive to promoting the healthy development of the national economy.As the world's second exchange of copper futures trading,Shanghai Futures Exchange has increased its international influence.Studying its linkage with the London Metal Exchange,which has the strongest influence on the world copper market,will help us to fully and accurately understand the influence of Shanghai Copper Futures on the international market,analyze its advantages,shortcomings and development laws,and provide theoretical and policy basis for China to grasp the pricing power of copper resources.Based on the theory of price linkage,this paper studies the correlation between copper futures prices of SHFE and LME,using unit root test of time series,co-integration test,Granger causality test,IRF and Variance Decomposition to explore the international influence and pricing position of China's copper futures market.The results show that the Shanghai copper futures market has achieved efficient market operation efficiency and information transmission mechanism after 20 years of development and improvement.However,the Shanghai copper futures market is still in a passive position in the world copper trade,and the international influence needs to be further improved.In view of the outstanding problems in the futures market,it puts forward policy recommendations such as consolidating the foundation of the futures market,improving the openness of the futures market,strengthening the linkage between domestic and foreign markets,improving market maturity,strengthening talent construction,and improving laws and regulations to promote standardized development.