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In this paper we examine price persistence in a set of minerals critical for the production of new energy vehicles. We implement techniques based on fractional integration also allowing for non-linearities and structural breaks at unknown periods of time. The results show that the series are generally very persistent, with orders of integration equal to or higher than 1 in practically all cases. The only exceptions being cobalt, tin and zinc if breaks are permitted and only for a given subsample. These findings are extremely relevant to initiate a discussion about the challenges that the new energy vehicle industry faces in China. China's government has already enforced some relevant initiatives to stabilise prices, but we conclude that additional measures will be necessary considering the high degree of uncertainty of certain supply-demand factors. Prof. Luis A. Gil-Alana gratefully acknowledges financial support from the MINEIC-AEI-FEDER PID2020-113691RB-I00 project from ‘Ministerio de Economía, Industria y Competitividad’ (MINEIC), ‘Agencia Estatal de Investigación’ (AEI) Spain and ‘Fondo Europeo de Desarrollo Regional’ (FEDER). He also acknowledges support from an internal Project of the Universidad Francisco de Vitoria, Madrid, Spain. |
