skip to main content

SciTech ConnectSciTech Connect

Title: Determinants of the Price of High-Tech Metals: An Event Study

The growing demand for high-tech products has resulted in strong growth in demand for certain minor metals. In combination with production concentrated in China, this caused strong and unpredicted price movements in recent years. As a result, manufacturing companies have to cope with additional risks. However, the detailed reasons for the price development are only partially understood. Therefore, we analyzed empirically which determinants can be assigned to price movements and performed an event study on the high-tech metals neodymium, indium, and gallium. Based on our dataset of news items, we were able to find coinciding events to almost 90% of all price jumps (recall). We showed that if any information about these events occurred with a probability of over 50% there would also be a price jump within 10 days (precision). However, the classical set of price determinants has to be extended for these specific markets, as we found unorthodox factors like holidays or weather that may be indicators for price movements. Therefore, we hope that our study supports industry for instance in performing more informed short-term planning of metals purchasing based on information about specific events.
Authors:
; ; ;  [1]
  1. University of Augsburg, Institute for Materials Resource Management (Germany)
Publication Date:
OSTI Identifier:
22469913
Resource Type:
Journal Article
Resource Relation:
Journal Name: Natural Resources Research (New York, N.Y.); Journal Volume: 24; Journal Issue: 2; Other Information: Copyright (c) 2015 International Association for Mathematical Geosciences; http://www.springer-ny.com; Country of input: International Atomic Energy Agency (IAEA)
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY AND ECONOMY; CHINA; DATASETS; DEMAND; GALLIUM; INDICATORS; INDIUM; MANUFACTURING; MARKET; NEODYMIUM; PLANNING; PRICES; PROBABILITY; RISK ASSESSMENT