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From demand expansion to technology substitution: The structural impact of the energy transition on key metals markets

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  • Qingjun Zhang
  • Yiqing Chang
  • Ziyi Chen

Abstract

The energy transition significantly impacts key metal markets through various shocks. Using supply, demand, and price data for key metals such as aluminum, copper, cobalt, and nickel in China from 2018 to 2025, this paper employs the TVP-SVAR-SV and GARCH models to categorize energy transition shocks into demand, supply, risk, technology, and policy. It systematically examines their dynamic effects on the metal market. The results show that: (1) Cobalt prices respond most strongly to demand shocks (peak 0.52); (2) Supply disruptions cause cobalt prices to reach extremes of 2.56 worldwide; (3) Geopolitical risks increase volatility to 0.853; (4) Technological shocks have a significant short-term impact on cobalt prices, while nickel prices tend to rise gradually over the long term; and (5) Indonesia's nickel export ban leads to a short-term nickel price change of 0.105. The study recommends enhancing supply chain resilience, promoting technological innovation, and strengthening international cooperation to manage market fluctuations.

Suggested Citation

  • Qingjun Zhang & Yiqing Chang & Ziyi Chen, 2026. "From demand expansion to technology substitution: The structural impact of the energy transition on key metals markets," Energy & Environment, , vol. 37(1), pages 483-508, February.
    • Handle: RePEc:sae:engenv:v:37:y:2026:i:1:p:483-508
    DOI: 10.1177/0958305X251389833
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