Financialization trends and climate policy uncertainty: Implications for China’s nonferrous metal market

Xiaohang Ren, Chenjia Fu, Lizhu Tao, Li Yuan and Ziyue Xu

Research in International Business and Finance, 2025, vol. 77, issue PA

Abstract: Uncertainty in climate policy development and implementation remains challenging for most industries. Given its significant role in the commodity market, measuring the degree of financialization within the nonferrous metal market is crucial to ensure economic stability. This study explores the dynamic impact of climate policy uncertainty on the degree of financialization of the nonferrous metal market by analyzing financial indices and the prices of copper, aluminum, and zinc futures from January 2, 2018, to November 30, 2023. Results indicate a low degree of financialization among nonferrous metals in China. Specifically, the financialization of copper and zinc exhibited cyclical changes while that of aluminum demonstrated a gradual increase in volatility. In terms of financialization, copper prices show the lowest frequency of changes, aluminum prices exhibit higher sensitivity to changes, and zinc prices occasionally show severe negative impacts. This study offers significant insights for governments, enterprises, and investors to address the challenges of climate change and the associated financial risks.

Keywords: Climate policy uncertainty; Nonferrous metal market; Financialization; Time-varying effect (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:77:y:2025:i:pa:s0275531925001783

DOI: 10.1016/j.ribaf.2025.102922

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