Evaluating criticality of strategic metals: Are the Herfindahl–Hirschman Index and usual concentration thresholds still relevant?

Pauline Bucciarelli, Emmanuel Hache and Valérie Mignon ()

Energy Economics, 2025, vol. 143, issue C

Abstract: This paper aims to evaluate the criticality of strategic metals by (i) investigating the validity of the Herfindahl–Hirschman Index (HHI) for assessing the supply risk aspect of criticality and (ii) determining an appropriate threshold for using this indicator in the context of criticality studies. Relying on a large panel of 33 strategic metals over the 1995–2021 period, our findings show that the variation of HHI has more impact on metal prices at lower HHI levels and question the existence of a threshold that clearly distinguishes high-risk markets from less risky ones based on their concentration levels. Overall, we show that using the HHI as a supply risk indicator, especially in conjunction with a threshold, may result in underestimating risks in less concentrated markets.

Keywords: Strategic metals; Criticality; Herfindahl–Hirschman index; Metal prices; Panel regression (search for similar items in EconPapers)
JEL-codes: C23 C24 Q02 Q34 (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: Evaluating criticality of strategic metals: Are the Herfindahl–Hirschman Index and usual concentration thresholds still relevant? (2024)
Working Paper: Evaluating criticality of strategic metals: Are the Herfindahl–Hirschman Index and usual concentration thresholds still relevant? (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:143:y:2025:i:c:s0140988325000313

DOI: 10.1016/j.eneco.2025.108208

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