Dynamic tail risk connectedness in different types of rare earth metals markets during major geopolitical events

<title>Abstract</title> <p>Rare earth elements (REEs) are essential for renewable energy, electric vehicles, advanced electronics, and defense industries, making them strategically important for global supply chains. This study examines the connectedness dynamics among Heavy Rare Earth Metals (HREMs), Light Rare Earth Metals (LREMs), and Rare Earth Processing Materials (REPMs) within China’s rare earth value chain. Using a Quantile on Quantile Connectedness framework, it analyzes asymmetric and nonlinear spillovers across bearish, normal, and bullish market conditions during the China export restriction crisis, the clean energy and electric vehicle boom, and the Russia–Ukraine war. Results reveal substantial heterogeneity in connectedness across market states and crisis periods. Total connectedness rises steadily toward upper quantiles, indicating near complete market integration under bullish conditions. LREMs consistently act as dominant shock transmitters, whereas REPMs remain net receivers. The findings provide valuable insights for portfolio risk management, critical mineral resilience, supply chain security, and strategic policy formulation. JEL Code: Q32, Q42, G15, F51, C58, D81</p>