• Title/Summary/Keyword: commodity market

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Lead-Lag Relationships between Import Commodity Prices and Freight Rates: The Case of Raw Material Imports of Korea

  • Kim, Chi-Yeol;Park, Kwang-So
    • Journal of Korea Trade
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    • v.23 no.2
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    • pp.34-45
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    • 2019
  • Purpose - This study investigates the lead-lag relations between the prices of major commodities imported into Korea and corresponding shipping freight rates. This paper aims to provide implications for cross-market causal relations between related economic segments. Design/Methodology - For economic long-run equilibrium between commodity prices and freights, a Johansen (1988) cointegration test is employed first. Then, Granger (1987) causality tests are performed under the vector error correction model (VECM) framework. Findings - The results indicate that the direction of causality varies by raw materials, which is attributable to different economic mechanisms in the corresponding shipping transportation sectors. In addition, the significance of causality becomes blurred during the post-2008 period. Practical Implication - Corporate managers in commodity trading, steelmaking, power generation, and oil refinery sectors can take advantage of the findings in this study as identifying leading economic indicators can be helpful for decision making in both short- and long-term strategies. Originality/value - This study is the first attempt to analyze the inter-relations between commodity prices and corresponding freight rates focusing on raw material imports of Korea.

Improvement Applied Cooling Off Period and A received Commodity Notice Period - the law related electronic commerce to protect customers' rights - (청약철회기간 및 상품수령통지기간의 적용 개선 방안 - 전자상거래등에서의 소비자보호에 관한 법률 -)

  • Chae, Hun;Kyung, Moon-Soo
    • International Commerce and Information Review
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    • v.10 no.3
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    • pp.75-99
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    • 2008
  • In the commercial transaction sellers use various sales strategies to increase profits, and this kind of sales strategies often causes damage to customers, it, moreover, is true that these examples happen in the electronic commercial market much more than in traditional one because of the characteristics if the electronic commerce. That's why people transact one another without face-to-face meeting in the electronic commerce market, so people one likely to fall for a trick to cheat and deceive. It's no doubt that the frequency of crime is higher than in face-to-face market. For that reason Cooling Off System, Consumer Compensation Insurance, Mutual Aid Association and Billing Payment Deposit System are in force the law related electronic commerce to protect customers' rights. In this paper it will be discussed about the periods of Cooling Off System and a received commodity notice of the Billing Payment Deposit System. Regarding these periods seven days for Cooling Off period and three days for a received commodity notice period are stipulated under the law of related electronic commerce to protect customers' rights, But each period has to be differentiated depending on each goods for this period to be reasonable and proper. Therefore in this study it will be focused on these facts and each period will be classified by the goods' purpose of purchase and quality.

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Effects of Investors' Sentiment on Commodity Futures Prices (투자자 심리가 상품선물가격에 미치는 영향)

  • Lee, Hyun-Bok;Park, Cheol-Ho
    • Journal of the Korea Convergence Society
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    • v.8 no.11
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    • pp.383-391
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    • 2017
  • This study examines the relationship between sentiment of speculators and price movements in the futures markets of WTI crude oil, copper, and wheat during the period 2003~2014 using Granger causality tests. The results indicate that speculative positions overall has no predictive power for returns in each futures market. Rather, returns seem to have effects on speculators' sentiment especially during periods of both economic expansion and recovery. During a recession, meanwhile, changes of speculators' sentiment index in the WTI crude oil and copper markets provide predictive power for returns in a positive direction, suggesting that speculators' pessimistic sentiment aggravates declines in commodity prices. Since the effects of speculative positions on market prices are ambiguous, tight regulations on speculative trading are not advisable. In a bearish market, however, regulatory bodies should consider raising speculative position limits because large speculative short positions and (or) liquidation of index traders' long positions may lead steep price declines.

Development of System Dynamics model for Electric Power Plant Construction in a Competitive Market (경쟁체제 하에서의 발전소 건설 시스템 다이내믹스 모델 개발)

  • 안남성
    • Korean System Dynamics Review
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    • v.2 no.2
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    • pp.25-40
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    • 2001
  • This paper describes the forecast of power plant construction in a competitive korean electricity market. In Korea, KEPCO (Korea Electric Power Corporation, fully controlled by government) was responsible for from the production of the electricity to the sale of electricity to customer. However, the generation part is separated from KEPCO and six generation companies were established for whole sale competition from April 1st, 2001. The generation companies consist of five fossil power companies and one nuclear power company in Korea at present time. Fossil power companies are scheduled to be sold to private companies including foreign investors. Nuclear power company is owned and controlled by government. The competition in generation market will start from 2003. ISO (Independence System Operator will purchase the electricity from the power exchange market. The market price is determined by the SMP(System Marginal Price) which is decided by the balance between demand and supply of electricity in power exchange market. Under this uncertain circumstance, the energy policy planners such as government are interested to the construction of the power plant in the future. These interests are accelerated due to the recent shortage of electricity supply in California. In the competitive market, investors are no longer interested in the investment for the capital intensive, long lead time generating technologies such as nuclear and coal plants. Large unclear and coal plants were no longer the top choices. Instead, investors in the competitive market are interested in smaller, more efficient, cheaper, cleaner technologies such as CCGT(Combined Cycle Gas Turbine). Electricity is treated as commodity in the competitive market. The investors behavior in the commodity market shows that the new investment decision is made when the market price exceeds the sum of capital cost and variable cost of the new facility and the existing facility utilization depends on the marginal cost of the facility. This investors behavior can be applied to the new investments for the power plant. Under these postulations, there is the potential for power plant construction to appear in waves causing alternating periods of over and under supply of electricity like commodity production or real estate production. A computer model was developed to sturdy the possibility that construction will appear in waves of boom and bust in Korean electricity market. This model was constructed using System Dynamics method pioneered by Forrester(MIT, 1961) and explained in recent text by Sternman (Business Dynamics, MIT, 2000) and the recent work by Andrew Ford(Energy Policy, 1999). This model was designed based on the Energy Policy results(Ford, 1999) with parameters for loads and resources in Korea. This Korea Market Model was developed and tested in a small scale project to demonstrate the usefulness of the System Dynamics approach. Korea electricity market is isolated and not allowed to import electricity from outsides. In this model, the base load such as unclear and large coal power plant are assumed to be user specified investment and only CCGT is selected for new investment by investors in the market. This model may be used to learn if government investment in new unclear plants could compensate for the unstable actions of private developers. This model can be used to test the policy focused on the role of unclear investments over time. This model also can be used to test whether the future power plant construction can meet the government targets for the mix of generating resources and to test whether to maintain stable price in the spot market.

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A Study on the International Fisher Effect : An Investigation from South Korea and China

  • He, Yugang
    • The Journal of Industrial Distribution & Business
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    • v.9 no.7
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    • pp.33-42
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    • 2018
  • Purpose - This paper aims to verify whether the Fisher effect and the international Fisher effect are significant between China and South Korea in the long and short run, respectively. Research design, data, and methodology - The annual and monthly data, respectively, are employed to conduct an empirical estimation under the fully modified ordinary least squares(FMOLS). The nominal interest rate is treated as an independent variable. The inflation rate is treated as a dependent variable. Results - The results exhibit whenever in the long or short run, the Fisher effect exists in China and South Korea. However, the Fisher effect in South Korea is more significant than that of in China. Meanwhile, an empirical analysis is also preformed to investigate the long-run and the short-run international Fisher effect between China and South Korea. The deviation from the equilibrium relationship is that the commodity market and the Financial market have started to integrate in China. But China's integrated level proved to be relatively lower. Conclusions - To exploit that the Fisher effect and the international Fisher effect hold between China and South Korea can help both countries deal with the sufferings from integration of the commodity market and the financial market.

A Study on the Reservation Wage of Housewife (주부의 요구賃金 결정요인에 관한 연구)

  • 소연경;문숙재
    • Journal of Families and Better Life
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    • v.7 no.1
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    • pp.119-138
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    • 1989
  • This study attempts to apply its result to decision whether housewives are in the labor market or not by investigating the level of reservation wage of them and the influencing factors on it. The purpose of this study is to analyse the effects by identifying , on the basis of theoretical models, the factors that influence reservation wage, and to predict future state of female employment. 1) The level of reservation wage of housewives showed significant differences by husband's income, household asset, housewife's education level, housewife's age, number of children division of husband in household labor, and by three marketization of housework. 2) The variables which affected reservation wage of housewife independently had influence on it in the following order: Husband's income, education level, age affect positively reservation wage of housewife, and a negative relation has been found between division of husband, level of commodity substitution and reservation wage of housewife. 3) Husband's income, housewife's education level, housewife's age, division of husband in household labor, level of commodity substitution give direct effects on reservation wage of housewife. Education level, age, number of children and family type influenced reservation wage of housewife through level of commodity substitution indirectly.

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Commodity Prices, Tax Purpose Recognition and Bitcoin Volatility: Using ARCH/GARCH Modeling

  • JALAL, Raja Nabeel-Ud-Din;SARGIACOMO, Massimo;SAHAR, Najam Us
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.11
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    • pp.251-257
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    • 2020
  • The study investigates the role of commodity prices and tax purpose recognition on bitcoin prices. Since the introduction of bitcoin in 2008, emphasis has focused on economists, policy-makers and analysts drastically increasing bitcoin's accessibility and commodity values (Dumitrescu & Firică, 2014). This study employs GARCH and EGARCH from ARCH/GARCH family on daily nature data. We measure the volatile behavior of bitcoin by employing auto-regressive conditional heteroscedasticity model with the aim to explore the relationship between major commodities and bitcoin volatility. We focus on major commodities like gold, silver, platinum, and crude oil to be regressed with bitcoin. The daily prices of commodities were retrieved from www.investing.com and bitcoin prices from www.coindesk.com for the period from 29April 2013 to 16 October 2018. Results confirmed the currency's long-term volatile behavior, which is due to its composition and market dynamics, whereas the existence of asymmetric information effect is not confirmed. Tax recognition by other countries may in future help in controlling the volatility as bitcoin is not a country-specific security. But, only silver impacts on volatility in comparison to oil prices and platinum, which is due to its similar features with gold. Eventually, bitcoin can be used for risk diversification and money making.

A Study on Price Discovery Function of Japan's Frozen Shrimp Future Market (일본 냉동새우 선물시장의 가격발견기능에 관한 연구)

  • Nam Soo-Hyun
    • The Journal of Fisheries Business Administration
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    • v.37 no.1 s.70
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    • pp.95-110
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    • 2006
  • Japan's frozen shrimp future market is the only fisheries future commodity market in the world. This empirical study examines the lead and lag relationship between Japan frozen shrimp spot and future markets using the daily prices from August 1, 2002 to December 31, 2005. Frozen shrimp future contract is listed on Japan Kansai Commodities Exchange. Japan imports approximately 250,000 tons of frozen shrimp annually, of which just under 70,000 tons, nearly 30%, are black tiger shrimp. Approximately 90% of black tiger shrimp are caught in Indonesia, India, Thailand and Vietnam, and the two largest consumers of these shrimp are Japan and the U.S.A. Kansai Commodities Exchange adopts the India black tiger shrimp as standard future commodity. We use unit root test, Johansen cointegration test, Granger causality test, Vector autoregressive analysis and Impulse response analysis. However, considering the long - term relationships between the level variables of frozen shrimp spot and futures, we introduced Vector Error Correction Model. We find that the price change of frozen shrimp futures with next 1, 2, 3, 4, 5 month maturity have a strong predictive power to the change of frozen shrimp spot and the change of frozen shrimp spot also have a predictive power to the change of frozen shrimp with next 1, 2, 3 month maturity. But, the explanatory power of the frozen shrimp futures is relatively greater than that of frozen shrimp spot.

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Feasibility Analysis for Futures Trading of Imported Crude Oil (국내 수입 원유의 선물거래 타당성 분석)

  • Yun, Won Cheol
    • Environmental and Resource Economics Review
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    • v.9 no.2
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    • pp.421-449
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    • 2000
  • The objective of this paper is to examine whether it is feasible to introduce an crude oil futures contract on domestic commodity exchange in order to minimize the price risks of imported crude oil. In addition. this study suggests the policy issues to promote futures trading and the alternatives to use foreign energy compares the five criteria to evaluate the feasibility of crude oil futures trading on the domestic exchange. Related to the possibility of successful futures trading of imported crude oil on the domestic exchange, they are evaluated as follows: it is highly possible to succeed for the aspects of price volatility, potential market size or liquidity, and commodity homogeneity; but it is inappropriate for the aspects of deliverable amounts and market power or market structure. Therefore, it is concluded that trading a new futures contract for the underlying imported crude oil on the domestic exchange is inappropriate. For the policy issues and the hedging alternatives, first, it is urgent to establish an atmosphere for futures trading by promoting spot trading. Second, for the case of futures trading on the domestic exchange it is important to consider the simultaneous hedging of crude oil price and foreign exchange risks and mutual offsetting mechanism with major foreign exchanges. Third, for the case of futures trading on foreign exchanges it is reasonable to regard cooperation among concerned companies, government support for futures trading and direct participation into futures trading by the government.

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Audio Guidance Application For Commodity Prices Using Public Data And AI Chatbot (공공데이터와 AI챗봇을 이용한 물가 음성안내 앱 서비스)

  • Lee, Jae-Seon;Kang, Kyeong-Don;Park, Tae-Yok;Jung, Deok-Gil
    • Proceedings of the Korean Institute of Information and Commucation Sciences Conference
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    • 2018.05a
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    • pp.251-253
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    • 2018
  • As the prices of agricultural, fishery, and dairy products have been fluctuating due to recent instability on commodity prices, so consumers have been more inclined to make purchase without specific criteria by relying on marketing or their personal experiences and senses of market. The core function of this application is precisely and conveniently telling the consumption index to consumers who are waved by unstable commodity prices by helping users to easily understand the price index of agricultural, fishery, and dairy products in real time using public data. And, it also includes the AI Chatbot and voice recognition function, and meets the convenience of natural language processing and hands-free etc..

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