Impact of supply chain pressure on traditional energy and metal markets: A Wavelet-based Quantile-on-Quantile perspective

Ahmed H. Elsayed, Giray Gozgor, Rabeh Khalfaoui and Salma Tarchella

Journal of Commodity Markets, 2025, vol. 38, issue C

Abstract: This paper investigates the impact of the global supply chain pressure and geopolitical tensions on prominent energy and metals markets using data from January 1998 to April 2023. To this end, the study adopts Wavelet-based Quantile-on-Quantile estimations to scrutinise the time-varying nature of the relationships over the sample period and under different market conditions. The results reveal that the global supply chain pressure predicts commodity returns across various time horizons and quantiles, particularly during extreme supply chain pressures. Conversely, the impacts of geopolitical risks are more pronounced in the short- and mid-term, suggesting investors adjust energy and metal investments accordingly. The paper also indicates that commodities can play a dual role as investment and diversification assets, offering a hedge against global supply chain disruptions and geopolitical events. These findings contribute valuable insights into risk management, investment strategies, and policymakers' decision-making processes.

Keywords: Energy markets; Metal markets; Global supply chain pressures; Geopolitical risks; Wavelet technique; Quantile-on-Quantile estimations (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocoma:v:38:y:2025:i:c:s2405851325000169

DOI: 10.1016/j.jcomm.2025.100472

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