Metals of the future in a world in crisis: Geopolitical disruptions and the cleantech metal industry

This paper investigates the effect of geopolitical risks on the idiosyncratic and systemic risks of the cleantech metal stock markets in China, a major producer of these metals and consumer of renewable energy technologies. Cleantech metals are defined as those fundamental to the production of clean energy technologies, such as wind turbines, solar panels, and batteries for electric vehicles. Using data on cleantech metal stocks between 2010 and 2024, we show that extreme upward movements in geopolitical risks significantly Ganger cause extreme movements in individual cleantech metal stocks. In addition, we find that geopolitical risks also drive common volatility in cleantech metal markets, particularly at extreme quantiles. Our results indicated a less significant effect of geopolitical risks on cleantech metal markets at the median quantile.