Multiscale risk spillovers among critical mineral markets - insights from conditional and aggregated connectedness approach

Jiajia Wei, Wang Gao and Hongwei Zhang

International Review of Financial Analysis, 2025, vol. 107, issue C

Abstract: This study constructs a systematic risk assessment framework for critical mineral markets by introducing conditional and aggregate connectedness methods. It analyzes the multiscale dynamic risk spillovers among critical mineral markets in China, the United States, and Europe. The results indicate the following: (1) Copper, palladium and platinum are the main net risk spillovers, while minor minerals such as indium and cadmium are net risk receivers. (2) China dominates short-term spillovers in industrial metals like copper and aluminum, whereas long-term spillovers are primarily associated with precious metals such as platinum and palladium. The United States exerts a long-term spillover effect on precious metals but has only a short-term impact on indium and selenium. In Europe, long-term spillovers are concentrated in the new energy sector, particularly aluminum, selenium, and vanadium. (3) Risk spillovers in critical mineral markets exhibit time-varying characteristics, intensifying during major geopolitical events such as the 2017 U.S. presidential election, the COVID-19 pandemic, and the Russia-Ukraine conflict. These dynamics underscore the systemic impact of geopolitical shocks on global mineral markets. The findings provide valuable theoretical insights and empirical support for policymakers in resource allocation and for investors in enhancing risk management strategies.

Keywords: Critical minerals; Conditional and aggregated connectedness; Time-frequency domain (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:107:y:2025:i:c:s105752192500609x

DOI: 10.1016/j.irfa.2025.104522

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