Impact of Baltic Dry index on critical metal prices: Implications for renewable energy supply chains

Abstract

This study investigates the dynamic relationship between the Baltic Dry Index (BDI) and the prices of metals essential to renewable energy technologies, such as copper, nickel, and cobalt. Using daily data from 2015 to 2024, we employ wavelet coherence and a TVP-VAR-based connectedness decomposition to uncover timevarying, directional, and frequency-sensitive linkages between maritime transport costs and clean energy metal markets. Our findings show that shipping costs are not merely passive reflections of market conditions but active components shaping price fluctuations-particularly during global disruptions like the COVID-19 pandemic. Copper and zinc exhibit strong comovement with freight rates, while nickel and cobalt display evolving interaction patterns over time. These results underscore the systemic role of maritime logistics in renewable energy supply chains and highlight freight rate shocks as a potential vulnerability for mineral cost stability. We argue about integrating transport risk into mineral sourcing strategies and energy transition planning.