Impact of Tariffs and Macroeconomic Factors on US Non-Ferrous Metal Prices: An Empirical Analysis
Keywords:
Metal Trading; London Stock Exchange; Tariffs, Metal Import; Exchange Rate Dynamics
Abstract
This paper analyses the factors that determine the prices of the non-ferrous metal in the US, specifically the role of tariffs and important macroeconomic variables. The analysis uses US data, explanatory variables as ferrous metal imports, GDP, exchange rates and tariff rates. A multiple linear regression model is used, and relevant variables are transformed by the use of logarithmic transformation to enhance the model interpretability and model fit. The results indicate that import demand has a strong and statistically strong positive impact on metal prices, but GDP has a positive but insignificant impact relationship. Conversely, tariff rates are statistically non-significant implying that there is only a minimal direct influence on the price movements of metals. Diagnostic tests ensure that there is no heteroskedasticity and autocorrelation, even though signs of possible model misspecification are found. Overall, the findings emphasize the predominance of market fundamentals in price determination of metals over trade policy, making valuable contributions to policymakers and researchers.
References
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Chen, X., & Tongurai, J. (2024). Revisiting the interdependences across global base metal futures markets: Evidence during the main waves of the COVID-19 pandemic. Research in International Business and Finance. https://doi.org/10.1016/j.ribaf.2024.102391
Ehrlich, L. G. (2018). What drives nickel prices: A structural VAR approach. https://www.econstor.eu/handle/10419/183607
Shao, Y. (2023). The Impact of the US-China Trade Conflict on Chinas Metal Market. Advances in Economics, Management and Political Sciences. https://doi.org/10.54254/2754-1169/53/20230842
Prestwich, R. (2017). America’s dependence on the world’s.
Zhu, X. (2015). The “Chinese Demand” Decomposition and Explanation of International Non-Ferrous Metal Prices. Economic Survey. https://en.cnki.com.cn/Article_en/CJFDTotal-JJJW201506013.htm
Sokolov, A. V., & Borodina, A. V. (n.d.). Analysis of factors of primary nickel prices dynamics. https://doi.org/10.25205/1818-7862-2014-14-3-86-102
Liu-guo, S. (2012). An Empirical Research on US Dollar,Oil and Metal Prices Based on VAR Model. Economic Survey.
Fan, M. (2023). The Impact of U.S. Monetary Policy on Metal Futures Prices: An Arch Model Analysis. Advances in Economics, Management and Political Sciences. https://doi.org/10.54254/2754-1169/21/20230250
Kucher, O., & McCoskey, S. (2016). The Long-Run Relationship between Precious Metal Prices and the Business Cycle. Social Science Research Network. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2850775
Zhang, Z. (2005). On the Relationship Between China’s Industrial Basic Metal Forward Price and Spot Price over Time. Statistics & Information Tribune.
Agnese, P., García-del-Barrio, P., Gil‐Alana, L. A., & Pérez de Gracia, F. (2024). Precious metal prices: a tale of four US recessions. Studies in Economics and Finance. https://doi.org/10.1108/sef-09-2023-0550
Moore, G. H. (1988). Inflation Cycles and Metals Prices. Mineral Processing and Extractive Metallurgy Review, 3, 95–104. https://doi.org/10.1080/08827508808952618
van der Nest, M., & van Vuuren, G. (2023). Metal price behaviour during recent crises: COVID-19 and the Russia–Ukraine conflict. Journal of Economic and Financial Sciences, 16(1). https://doi.org/10.4102/jef.v16i1.819
Salotti, S., Rocchi, P., Rueda Cantuche, J., & Arto, I. (2019). Macroeconomic effects of US tariff on steel and aluminium: who would pay the bill? Research Papers in Economics. https://doi.org/10.2760/387494
Online appendix. (2025). https://doi.org/10.1371/journal.pone.0313204.s001
Ahmad, M., & Ahmad, I. (2023). Tariff Pass-Through and Implications for Domestic Markets: Evidence from U.S. Steel Imports. Social Science Research Network. https://doi.org/10.2139/ssrn.4011885
WANG, W., CHEN, W., TANG, L., XIONG, H., LIU, G., & SHI, L. (n.d.). The Potential Impact of U.S.tariffs on Aluminium Products and Its Countermeasures. https://doi.org/10.18402/resci.2018.07.01
Becerril Torres, O. U., Munguía Vázquez, G., & Wieloch, J. (2022). The effects of US import tariffs on steel and aluminum imports from Mexico. Journal of International Studies, 15(4), 165–179. https://doi.org/10.14254/2071-8330.2022/15-4/10
Huang, C., & Liu, J. (n.d.). A Study of the Correlation Between the Economic Fluctuation and the Metal Price Fluctuation. https://doi.org/10.3969/j.issn.1004-468x.2007.04.002
Zheng, X., Zheng, X., Wang, R., Wood, R., Wang, C., & Hertwich, E. G. (2018). High sensitivity of metal footprint to national GDP in part explained by capital formation. Nature Geoscience, 11(4), 269–273. https://doi.org/10.1038/S41561-018-0091-Y
Kozawa, S., & Tsukihashi, F. (2010). Prediction Model of Global Demand for Iron Source by Utility of Stock Hypothesis—Verification of Predictive Power and Outlook for Demand to 2050—. Isij International, 50(10), 1503–1510. https://doi.org/10.2355/ISIJINTERNATIONAL.50.1503
Determinantes macroeconómicos de los precios de los principales commodities minero metálicos del Perú. Una aproximación empírica 1990 - 2016. (2019). https://doi.org/10.21142/tl.2019.718
Roberts, M. C. (2008). Synchronization and Co‐Movement of Metal Prices. Minerals & Energy - Raw Materials Report, 23(3), 105–118. https://doi.org/10.1080/14041040902805116
Farooki, M. (2010). The Southern Engine of Growth and Hard Commodity Prices: Does China Lead to Disruptive Development. https://doi.org/10.21954/OU.RO.0000D577
오서연, & Kim, J. (2013). The Effect of OECD and BRICs’ GDP on Base Metal Prices. Journal of the Korean Society of Mineral and Energy Resources Engineers, 50(5), 613–624. https://doi.org/10.12972/KSMER.2013.50.5.613
Ojeda-Joya, J. N., Jaulín-Méndez, O. F., & Bustos-Peláez, J. C. (2015). The Interdependence between Commodity-Price and GDP Cycles: A Frequency Domain Approach. Research Papers in Economics. https://econpapers.repec.org/RePEc:col:000094:013991
Halada, K., Shimada, M., & Ijima, K. (2007). Decoupling Status of Metal Consumption from Economic Growth. Journal of The Japan Institute of Metals, 71(10), 823–830. https://doi.org/10.2320/JINSTMET.71.823
Fan, M. (2023). The Impact of U.S. Monetary Policy on Metal Futures Prices: An Arch Model Analysis. Advances in Economics, Management and Political Sciences. https://doi.org/10.54254/2754-1169/21/20230250
Choi, H. W., Heo, E., & Kim, K. (2020). SVAR Analysis of Factors Affecting Fluctuations of Six Major Nonferrous Metal Prices. Journal of the Korean Society of Mineral and Energy Resources Engineers, 57(4), 352–361. https://doi.org/10.32390/KSMER.2020.57.4.352
Piper, D. Z., & Nokleberg, W. J. (n.d.). Historical Trends in U.S. Mineral Statistics for Selected Non-Ferrous Metals. https://doi.org/10.3133/ofr0229
Basoglu, M. S., Korkmaz, T., & Çevik, E. İ. (2014). London Metal Exchange: Causality Relationship between the Price Series of Non-Ferrous Metal Contracts. International Journal of Economics and Financial Issues, 4(4), 726–734. http://www.econjournals.com/index.php/ijefi/article/download/875/pdf
Dussaux, D., & Glachant, M. (2018). How much does recycling reduce imports? Evidence from metallic raw materials. Research Papers in Economics. https://ideas.repec.org/p/hal/journl/hal-01877595.html
Göçer, Ş., Bulut Deniz, M., & Bursal, M. (2019). Türkiye’de Dış Ticaret Hadlerinin Altın, Gümüş, Dolar, Petrol, ve Doğalgaz Fiyatları ile İlişkisi: Eş Bütünleşme Analizi. 10(20), 191–203. https://dergipark.org.tr/en/download/article-file/868817
Caltzoncit Hernández, D. E., & Cruz Álvarez, J. G. (2018). Análisis de precio spot del acero en México: Caso de las importaciones Chinas en territorio nacional (Analysis of spot price of steel in Mexico: Case of the chinese imports in national territory). 14(27). https://doi.org/10.29105/RINN14.27-3
Zhong, M., He, R., Chen, J., & Huang, J. (2019). Time-varying effects of international nonferrous metal price shocks on China’s industrial economy. Physica A-Statistical Mechanics and Its Applications, 528, 121299. https://doi.org/10.1016/J.PHYSA.2019.121299
Roberts, M. C. (2008). Synchronization and Co‐Movement of Metal Prices. Minerals & Energy - Raw Materials Report, 23(3), 105–118. https://doi.org/10.1080/14041040902805116
Chen, X., & Tongurai, J. (2024). Revisiting the interdependences across global base metal futures markets: Evidence during the main waves of the COVID-19 pandemic. Research in International Business and Finance. https://doi.org/10.1016/j.ribaf.2024.102391
Ehrlich, L. G. (2018). What drives nickel prices: A structural VAR approach. https://www.econstor.eu/handle/10419/183607
Shao, Y. (2023). The Impact of the US-China Trade Conflict on Chinas Metal Market. Advances in Economics, Management and Political Sciences. https://doi.org/10.54254/2754-1169/53/20230842
Prestwich, R. (2017). America’s dependence on the world’s.
Zhu, X. (2015). The “Chinese Demand” Decomposition and Explanation of International Non-Ferrous Metal Prices. Economic Survey. https://en.cnki.com.cn/Article_en/CJFDTotal-JJJW201506013.htm
Sokolov, A. V., & Borodina, A. V. (n.d.). Analysis of factors of primary nickel prices dynamics. https://doi.org/10.25205/1818-7862-2014-14-3-86-102
Liu-guo, S. (2012). An Empirical Research on US Dollar,Oil and Metal Prices Based on VAR Model. Economic Survey.
Fan, M. (2023). The Impact of U.S. Monetary Policy on Metal Futures Prices: An Arch Model Analysis. Advances in Economics, Management and Political Sciences. https://doi.org/10.54254/2754-1169/21/20230250
Kucher, O., & McCoskey, S. (2016). The Long-Run Relationship between Precious Metal Prices and the Business Cycle. Social Science Research Network. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2850775
Zhang, Z. (2005). On the Relationship Between China’s Industrial Basic Metal Forward Price and Spot Price over Time. Statistics & Information Tribune.
Agnese, P., García-del-Barrio, P., Gil‐Alana, L. A., & Pérez de Gracia, F. (2024). Precious metal prices: a tale of four US recessions. Studies in Economics and Finance. https://doi.org/10.1108/sef-09-2023-0550
Moore, G. H. (1988). Inflation Cycles and Metals Prices. Mineral Processing and Extractive Metallurgy Review, 3, 95–104. https://doi.org/10.1080/08827508808952618
van der Nest, M., & van Vuuren, G. (2023). Metal price behaviour during recent crises: COVID-19 and the Russia–Ukraine conflict. Journal of Economic and Financial Sciences, 16(1). https://doi.org/10.4102/jef.v16i1.819
Salotti, S., Rocchi, P., Rueda Cantuche, J., & Arto, I. (2019). Macroeconomic effects of US tariff on steel and aluminium: who would pay the bill? Research Papers in Economics. https://doi.org/10.2760/387494
Online appendix. (2025). https://doi.org/10.1371/journal.pone.0313204.s001
Ahmad, M., & Ahmad, I. (2023). Tariff Pass-Through and Implications for Domestic Markets: Evidence from U.S. Steel Imports. Social Science Research Network. https://doi.org/10.2139/ssrn.4011885
WANG, W., CHEN, W., TANG, L., XIONG, H., LIU, G., & SHI, L. (n.d.). The Potential Impact of U.S.tariffs on Aluminium Products and Its Countermeasures. https://doi.org/10.18402/resci.2018.07.01
Becerril Torres, O. U., Munguía Vázquez, G., & Wieloch, J. (2022). The effects of US import tariffs on steel and aluminum imports from Mexico. Journal of International Studies, 15(4), 165–179. https://doi.org/10.14254/2071-8330.2022/15-4/10
Published
2026-07-11
How to Cite
Chopra, A. (2026). Impact of Tariffs and Macroeconomic Factors on US Non-Ferrous Metal Prices: An Empirical Analysis. International Journal of Social Science Research and Review, 9(7), 249-262. https://doi.org/10.47814/ijssrr.v9i7.3507
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