The changing dynamics in global metal market: how the energy transition and geofragmentation may disrupt commodity prices

Hugh Miller and Juan Pablo Martinez Martinez

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The energy transition and the increase in trade restrictions driven by geofragmentation present significant risks to critical mineral markets. This paper examines a subset of essential transition-critical minerals – aluminium, cobalt, copper, lithium and nickel – to assess how metal commodity markets may be impacted by shifting global economic dynamics. The study explores the key long-term drivers of commodity price formation, the medium-term effects of trade interventions on price expectations, and the short-term volatility triggered by trade announcements. The results indicate that metal commodity markets are primarily influenced by demand-related shocks, with copper and aluminium prices being primarily driven by aggregate demand, whereas nickel prices are influenced by a more diverse set of shocks. Similarly, in the short term, nickel, cobalt and lithium prices are more sensitive to trade announcements compared with copper and aluminium prices. The findings and discussion focus on the risks to the energy transition and financial markets.

Keywords: aluminium; cobalt; commodities; copper; critical minerals; energy transition; lithium; metals; nickle; trade (search for similar items in EconPapers)
JEL-codes: J01 N0 R14 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2026-01-12
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:137108

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