International copper prices are mainly based on London Metal Exchange Futures Copper prices

As an active futures product, copper has certain financial attributes, and its price will be affected by the financial market. However, as the basic raw material of industry, its price fluctuation is essentially affected by the supply and demand relationship of the product market. At present, the pricing of international copper trade is mainly based on London gold.

The price of copper in the medium term (hereinafter referred to as LME copper) is set as the benchmark. The main reason for the formation of the above pricing mechanism is that copper is an important industrial raw material, copper spot trade is increasingly frequent and the scale is growing rapidly, while LME copper contracts are better adapted to market development.

Exhibition increases market liquidity and has the function of hedging. Most international copper producers, traders and consumers participate in LME copper futures trading. The futures copper price reflects the equilibrium price of supply and demand in the market. It has the characteristics of anticipation, continuity, openness and authority.

Because of its characteristics, the price of international copper spot trading is usually determined by taking the LME copper price as the reference standard, plus certain premium and related taxes and fees. Therefore, this paper takes the LME copper price as the representative of the international copper price.

According to the theory of supply-demand relationship, the equilibrium price of commodity must be the price when supply and demand are equal, and the fluctuation of supply and demand will lead to the fluctuation of commodity price, which determines the direction and intensity of price change. Copper, as a more active global commodity, is mainly priced.

Based on the LME copper price, and according to the trading rules, the LME copper is cathode copper (refined copper), so the international copper price is mainly affected by the global supply and demand of refined copper. With the rapid development of China’s economy, the demand for copper consumption is also rising.