Trends of Base Metals Prices


The real price of base metals exhibits a decreasing trend over time. We model base metals prices as the equilibrium of aggregate supply and demand. This allows us to study the effect of determinants of base metals prices. The trend in the price of base metals depends on technological progress, resource scarcity, natural resource taxes, and the interest rate. Under certain parameter restrictions we can explain the decreasing trend in prices over time. This phenomenon is mostly explained by the substitution effect and technological progress. We derive policy implications related to natural resource taxation.

Share and Cite:

Anh, N. and Semenov, A. (2015) Trends of Base Metals Prices. Theoretical Economics Letters, 5, 531-540. doi: 10.4236/tel.2015.54062.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] Tilton, J. (1989) The New View of Minerals and Economic Growth. Economic Record, 65, 265-278.
[2] Tilton, J. and Landsberg, H. (1999) Innovation, Productivity Growth, and the Survival of the US Copper Industry. Productivity in Natural Resource Industries; Improvement through Innovation, 109-139.
[3] Bunel, M. (2001) Estimating the Effects of Technology and Depletion on the Real Price of Copper in the U.S. Using a Cointegration Approach. Working Papers on Environment and Economics.
[4] Krautkraemer, J. (2005) Economics of Natural Resource Scarcity: The State of the Debate. Resources for the Future Discussion Paper, 5-14.
[5] Slade, M. (1982) Trends in Natural-Resource Commodity Prices: An Analysis of the Time Domain. Journal of Environmental Economics and Management, 9, 122-137.
[6] Stuermer, M. (2014) Industrialization and the Demand for Mineral Commodities. Working Paper, Federal Reserve Bank of Dallas, 1413.
[7] ICMM (2012) Trends in the Mining and Metals Industry. ICMM Report.
[8] Mudd, G. (2009) Historical Trends in Base Metal Mining: Backcasting to Understand the Sustainability of Mining. Proceedings 48th Annual Conference of Metallurgists, Canadian Metallurgical Society, Sudbury, 2009 August.
[9] Nguyen, B.A. and Semenov, A. (2015) Fluctuations in Base Metals Prices. Theoretical Economics Letters, 5.

Copyright © 2021 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.