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Systemic risk of commodity traders

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  • Glück, Thorsten
  • Adams, Zeno

Abstract

We examine the disruptions to global commodity flows following the default of a commodity trading firm. The physical commodity network is operated by a handful of large traders that are responsible for the timely delivery of raw materials and inputs to industrial production. We propose a model to simulate the resilience and response time of the network following a shock. Our results suggest that a number of commodity traders carry significant systemic risk. The forced removal of a trader from the network has considerable implications for the prices and availability of physical commodities over a period up to 12 months.

Suggested Citation

  • Glück, Thorsten & Adams, Zeno, 2025. "Systemic risk of commodity traders," Journal of Economic Dynamics and Control, Elsevier, vol. 179(C).
    • Handle: RePEc:eee:dyncon:v:179:y:2025:i:c:s0165188925001320
    DOI: 10.1016/j.jedc.2025.105166
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