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From black gold to green bond: The structural shift in pricing power of non-ferrous metals

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  • Shang, Yue
  • Chen, Yonghuai
  • Zhao, Baofang

Abstract

This study investigates the structural evolution of pricing mechanisms in China's non-ferrous metals market, focusing on the shifting dominance between green bonds and crude oil. Utilizing a State-Space model with Kalman filtering and the Mann-Kendall trend test, we provide robust evidence of a "Green Divergence." The results reveal that the pricing sensitivity of "transition metals"—specifically Copper, Nickel, Aluminum, Zinc, and Tin—to green bond shocks has exhibited a statistically significant, monotonic increase, signaling a structural decoupling from traditional energy costs. Conversely, Lead and Silver display a declining sensitivity, confirming that the green premium is more closely linked to industrial relevance in the low-carbon transition than to broad systemic factors. We conclude that the green bond market has transcended its role as a financing tool to become a dominant pricing factor for critical minerals. These findings highlight the deepening financialization of environmental risks and the emergence of a "Green-Risk-Parity" pricing logic in commodity markets.

Suggested Citation

  • Shang, Yue & Chen, Yonghuai & Zhao, Baofang, 2026. "From black gold to green bond: The structural shift in pricing power of non-ferrous metals," Finance Research Letters, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:finlet:v:99:y:2026:i:c:s1544612326004642
    DOI: 10.1016/j.frl.2026.109935
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