Metal Prices Made in China? A Network Analysis of Industrial Metal Futures

Apart from being the world’s greatest consumer and producer of industrial metals, China now also features the most actively traded industrial metal futures contracts worldwide. Using a sample of 29 futures contracts traded on exchanges in the United States, the United Kingdom, India and China, we estimate VAR models and conduct variance decompositions, which are then visualized in the form of networks. The results indicate that China is, despite its role as key actor in both real and financial industrial metal markets, a price taker.