Identification of high-risk agents and relationships in nickel, cobalt, and lithium trade based on resource-dependent networks

Nickel, cobalt, and lithium are the most critical raw materials for lithium-ion batteries (LIBs). The increasing demand for these materials has triggered worries about the trade dependency on raw materials. Traditional trade dependency measures make it difficult to identify high-risk countries (regions) from a systematic perspective. This paper proposes a global dependency index to recalculate systemic risks in the trade dependency network. Unlike the traditional trade network analysis, we construct the resource-dependent network by taking the dependency relationship as the edge and the global dependency index as the weight. We use the new network to explore the characteristics of the overall pattern of global trade and the concentration of dependency. Then, considering the heterogeneity of trading agents, country (regional) dependency is analyzed at the local and global levels. The dependency relationship coordinates are constructed to identify high-risk countries (regions). The results show that the trade is highly concentrated. Developed and emerging economies tend to import in quantity. The absolute dependency and global dependency of agents are heterogeneous. The distribution characteristics of agent relationships in the trade dependency coordinates are apparent. According to the results, policymakers and market participants can tailor trade strategies to reduce risks. This accounting method provides ideas for future studies on trade dependency on other resources.

Automated summary

This paper introduces a global dependency index to recalculate systemic risks in the trade dependency network, explores the characteristics of global trade patterns and dependency concentration through constructing a resource-dependent network, and analyzes the dependency of countries (regions) at local and global levels while considering the heterogeneity of trading agents.