Commodities Prices Modeling Using Gaussian Poisson-Exponential Stochastic Processes, A Practical Implementation In The Case Of Copper

The price adjustment mechanism is accounted for by market forces, in that –leaving aside speculative movements in financial markets, which in specific cases can be the cause of price volatilitythe market adjusts itself in periods of strong demand and rising prices through an increase in the offer, e.g. by opening up closed mines, by extending the life span of mines scheduled to be shut down, etc. Following this increase in the offer, prices tend to fall. In periods when prices are low, the opposite occurs, so that the offer decreases and prices tend to go up.