A novel critical mineral price index for energy transition

Critical minerals like copper, aluminum, and nickel serve as essential material bases for a clean and low-carbon energy system transition. However, these materials exhibit limited substitutability and are subject to considerable supply risks, with their prices further destabilized by factors such as high geographical concentration, geopolitical instability, uncertain technological advancements, and speculative trading. This study aims to provide concise and intuitive comprehensive information on critical minerals, which exhibit diverse price volatility characteristics. To achieve this, a critical mineral price index for energy transition (MPET) is proposed, utilizing the Divisia method, which considers price levels, usage intensity, and technological demands. The index covers 33 critical minerals across 11 energy transition sectors and employs a dynamic weighting mechanism to systematically track global market price trends from 2011 to 2023. The results show that: (1) MPET provides a dynamic reflection of the complex price fluctuations in the energy transition minerals market; (2) The Divisia method offers a valuable approach and data support for analyzing price drivers and understanding market trends; (3) By comparing MPET with fluctuations in price indices for other products, such as agriculture, energy, and minerals, it has been shown that MPET can provide reliable information, which can support the evaluation of the overall feasibility of energy transition projects. This paper provides a precise index tool for capturing market dynamics, which is of significant practical value for forecasting future market trends, optimizing resource allocation, and supporting decision-making in global energy transition efforts.