Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Network analysis shows systemic risk in mineral markets

16.11.2015

A shortage of a rare mineral could spur global market instabilities, according to a new analysis of international commodity trade networks.

Shortages of natural resources—minerals such as copper, aluminum, and mercury—could lead to cascading shocks and lead to instabilities in the global trade system, according to a study published today in the journal Science Advances.


Trade networks of platinum, lithium, and copper

Klimek et al, 2015

Mineral resources are increasingly important in the production of modern devices such as mobile phones and medical technologies. These resources are mined and shipped around the world through increasingly interlinked global trade networks.

“Regional shortages of minerals necessary for the manufacture of modern technologies could ripple throughout the trade system, leading to a sharp increase in the price volatility of such minerals in the global markets,” says Peter Klimek, a researcher at the Medical University of Vienna, who led the study in collaboration with IIASA researchers.

The study examined trade flows of 71 mineral commodities between 107 countries, using a new method to assess the systemic risk in commodity trade networks.

It shows that minerals that are produced as a byproducts of other processes—for example rare earth metals produced as a byproduct of phosphorus mining for fertilizer—are the most susceptible to price volatility leading to systemic instabilities, “The beauty of this methodology is that it allows the data to tell its own story,” says IIASA Ecosystems Services and Management Program Director Michael Obersteiner.

The new study grew out of a conversation with IIASA Advanced Systems Analysis researcher Stefan Thurner, who has previously applied similar methods to the study of systemic risk in financial markets.

“Commodity markets, like financial markets, are highly international and interconnected,” explains Thurner. “Understanding these networks gives us a handle to explain and possibly predict a large portion of the instabilities in terms of price volatility in the markets.”

In particular the study finds shortcomings in the management of non-fuel mineral resources that increase the systemic risk, and provides a method for countries to assess their resilience with respect to such rippling network effects. It proposes policy measures, for example a tax based on commodity risk that could create more stable markets.

The researchers plan to continue their collaboration, extending the methodology to explore other networked systems, for example the agriculture system, food trade, and food security.
Reference:
Klimek P, Obersteiner M, Thurner S, (2015). Systemic Trade Risk of Critical Resources. Science Advances 1, e1500522 doi:10.1126/sciadv.1500522

About IIASA:
The International Institute for Applied Systems Analysis (IIASA) is an international scientific institute that conducts research into the critical issues of global environmental, economic, technological, and social change that we face in the twenty-first century. Our findings provide valuable options to policy makers to shape the future of our changing world. IIASA is independent and funded by scientific institutions in Africa, the Americas, Asia, Oceania, and Europe. www.iiasa.ac.at 

MSc Katherine Leitzell | idw - Informationsdienst Wissenschaft

More articles from Studies and Analyses:

nachricht Researchers simplify tiny structures' construction drip by drip
12.11.2018 | Princeton University, Engineering School

nachricht Mandibular movement monitoring may help improve oral sleep apnea devices
06.11.2018 | Elsevier

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: A Chip with Blood Vessels

Biochips have been developed at TU Wien (Vienna), on which tissue can be produced and examined. This allows supplying the tissue with different substances in a very controlled way.

Cultivating human cells in the Petri dish is not a big challenge today. Producing artificial tissue, however, permeated by fine blood vessels, is a much more...

Im Focus: A Leap Into Quantum Technology

Faster and secure data communication: This is the goal of a new joint project involving physicists from the University of Würzburg. The German Federal Ministry of Education and Research funds the project with 14.8 million euro.

In our digital world data security and secure communication are becoming more and more important. Quantum communication is a promising approach to achieve...

Im Focus: Research icebreaker Polarstern begins the Antarctic season

What does it look like below the ice shelf of the calved massive iceberg A68?

On Saturday, 10 November 2018, the research icebreaker Polarstern will leave its homeport of Bremerhaven, bound for Cape Town, South Africa.

Im Focus: Penn engineers develop ultrathin, ultralight 'nanocardboard'

When choosing materials to make something, trade-offs need to be made between a host of properties, such as thickness, stiffness and weight. Depending on the application in question, finding just the right balance is the difference between success and failure

Now, a team of Penn Engineers has demonstrated a new material they call "nanocardboard," an ultrathin equivalent of corrugated paper cardboard. A square...

Im Focus: Coping with errors in the quantum age

Physicists at ETH Zurich demonstrate how errors that occur during the manipulation of quantum system can be monitored and corrected on the fly

The field of quantum computation has seen tremendous progress in recent years. Bit by bit, quantum devices start to challenge conventional computers, at least...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

“3rd Conference on Laser Polishing – LaP 2018” Attracts International Experts and Users

09.11.2018 | Event News

On the brain’s ability to find the right direction

06.11.2018 | Event News

European Space Talks: Weltraumschrott – eine Gefahr für die Gesellschaft?

23.10.2018 | Event News

 
Latest News

Putting food-safety detection in the hands of consumers

15.11.2018 | Information Technology

Insect Antibiotic Provides New Way to Eliminate Bacteria

15.11.2018 | Life Sciences

New findings help to better calculate the oceans’ contribution to climate regulation

15.11.2018 | Life Sciences

VideoLinks
Science & Research
Overview of more VideoLinks >>>