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Extreme Connectedness among Energy Transition Metals and Commodity Markets

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  • Bastianin, Andrea
  • Casoli, Chiara
  • Kocenda, Evzen
  • Li, Xiao

Abstract

The global energy transition is reshaping commodity demand, yet its implications for commodity risk transmission remain unclear. We analyze connectedness among Energy Transition Metals (ETMs) – a subset of metals that are key inputs in clean energy technologies – energy commodities, and industrial metals using a Quantile Factor VAR framework. We document strong state dependence: spillovers are substantially larger in the tails of the return distribution than at the median. While crude oil remains influential, its dominance weakens post-Covid as ETMs, particularly base ETMs, gain centrality. A complementary event-study shows ETM-related policy announcements amplify spillovers in extreme regimes, indicating structural reconfiguration and systemic implications.

Suggested Citation

  • Bastianin, Andrea & Casoli, Chiara & Kocenda, Evzen & Li, Xiao, 2026. "Extreme Connectedness among Energy Transition Metals and Commodity Markets," FEEM Working Papers 396404, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemwp:396404
    DOI: 10.22004/ag.econ.396404
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    Keywords

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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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