IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v95y2024ics0301420724005245.html
   My bibliography  Save this article

Deciphering iron ore trade dynamics: Supply disruption risk propagation in global networks through an improved cascading failure model

Author

Listed:
  • Wang, Chao
  • Yang, Hua
  • Hu, Xiaoqian
  • He, Xijun
  • Liu, Junge
  • Liang, Chen
  • Lim, Ming K.

Abstract

In recent years, the global dependence on iron ore, a vital strategic resource, has faced unexpected disruptions caused by geopolitical events and widespread health crises. This study investigates the dynamic evolution of the worldwide iron ore trade network from 1991 to 2020 to provide trading nations with effective strategies for reducing supply disruption risks. The classic cascade failure model is modified to incorporate risk absorption and adaptation capacities, allowing it to simulate the dynamic spread of iron ore supply disruption risk. This approach improves the model by considering a country's ability to reduce risk through alternatives, production adjustments, and other measures. Additionally, the redistribution ratio is calibrated using both original trade volume and key trade drivers. The results emphasize the importance of factors such as urbanization rate and industrial structure as the main drivers of global iron ore trade. Furthermore, the study finds that supply disruptions from major exporters like Brazil, Australia, and Canada have a significant impact on the trade network, especially affecting resources and economies in eastern and south-eastern Asia and Europe due to geographic trade constraints. To ensure the stability of global iron ore trade, the study proposes effective strategies, providing valuable policy insights for various nations.

Suggested Citation

  • Wang, Chao & Yang, Hua & Hu, Xiaoqian & He, Xijun & Liu, Junge & Liang, Chen & Lim, Ming K., 2024. "Deciphering iron ore trade dynamics: Supply disruption risk propagation in global networks through an improved cascading failure model," Resources Policy, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:jrpoli:v:95:y:2024:i:c:s0301420724005245
    DOI: 10.1016/j.resourpol.2024.105157
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420724005245
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2024.105157?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    2. Hosseini, Seyedmohsen & Ivanov, Dmitry & Dolgui, Alexandre, 2019. "Review of quantitative methods for supply chain resilience analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 285-307.
    3. Arif Imam Suroso, 2022. "The Effect of Logistics Performance Index Indicators on Palm Oil and Palm-Based Products Export: The Case of Indonesia and Malaysia," Economies, MDPI, vol. 10(10), pages 1-15, October.
    4. Gong, Qiang & Wang, Kun & Fan, Xingli & Fu, Xiaowen & Xiao, Yi-bin, 2018. "International trade drivers and freight network analysis - The case of the Chinese air cargo sector," Journal of Transport Geography, Elsevier, vol. 71(C), pages 253-262.
    5. Rebekka Burkholz & Frank Schweitzer, 2019. "International crop trade networks: The impact of shocks and cascades," Papers 1901.05872, arXiv.org.
    6. Marchand, Philippe & Carr, Joel A & Dell’Angelo, Jampel & Fader, Marianela & Gephart, Jessica A & Kummu, Matti & Magliocca, Nicholas R & Porkka, Miina & Puma, Michael J & Ratajczak, Zak & Rulli, Maria, 2016. "Reserves and trade jointly determine exposure to food supply shocks," LSE Research Online Documents on Economics 67783, London School of Economics and Political Science, LSE Library.
    7. Djalma Araújo Rangel & Taiane Kamel de Oliveira & Maria Silene Alexandre Leite, 2015. "Supply chain risk classification: discussion and proposal," International Journal of Production Research, Taylor & Francis Journals, vol. 53(22), pages 6868-6887, November.
    8. Paolo Bartesaghi & Michele Benzi & Gian Paolo Clemente & Rosanna Grassi & Ernesto Estrada, 2019. "Risk-dependent centrality in economic and financial networks," Papers 1907.07908, arXiv.org, revised Apr 2020.
    9. Kang, Xinyu & Wang, Minxi & Chen, Lu & Li, Xin, 2023. "Supply risk propagation of global copper industry chain based on multi-layer complex network," Resources Policy, Elsevier, vol. 85(PA).
    10. Kyu-Min Lee & Jae-Suk Yang & Gunn Kim & Jaesung Lee & Kwang-Il Goh & In-mook Kim, 2011. "Impact of the Topology of Global Macroeconomic Network on the Spreading of Economic Crises," PLOS ONE, Public Library of Science, vol. 6(3), pages 1-11, March.
    11. Hu, Xiaoqian & Wang, Chao & Lim, Ming K. & Chen, Wei-Qiang, 2020. "Characteristics of the global copper raw materials and scrap trade systems and the policy impacts of China's import ban," Ecological Economics, Elsevier, vol. 172(C).
    12. Notteboom, Theo, 2016. "The adaptive capacity of container ports in an era of mega vessels: The case of upstream seaports Antwerp and Hamburg," Journal of Transport Geography, Elsevier, vol. 54(C), pages 295-309.
    13. Kyu-Min Lee & Jae-Suk Yang & Gunn Kim & Jaesung Lee & Kwang-Il Goh & In-mook Kim, 2010. "Impact of the topology of global macroeconomic network on the spreading of economic crises," Papers 1011.4336, arXiv.org, revised Apr 2011.
    14. Wang, Xingxing & Li, Huajiao & Yao, Huajun & Zhu, Depeng & Liu, Nairong, 2018. "Simulation analysis of the spread of a supply crisis based on the global natural graphite trade network," Resources Policy, Elsevier, vol. 59(C), pages 200-209.
    15. Hao, Xiaoqing & An, Haizhong & Sun, Xiaoqi & Zhong, Weiqiong, 2018. "The import competition relationship and intensity in the international iron ore trade: From network perspective," Resources Policy, Elsevier, vol. 57(C), pages 45-54.
    16. Hu, Xiaoqian & Wang, Chao & Lim, Ming K. & Chen, Wei-Qiang & Teng, Limin & Wang, Peng & Wang, Heming & Zhang, Chao & Yao, Cuiyou & Ghadimi, Pezhman, 2023. "Critical systemic risk sources in global lithium-ion battery supply networks: Static and dynamic network perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    17. Rose, Adam & Wei, Dan & Paul, Donald, 2018. "Economic consequences of and resilience to a disruption of petroleum trade: The role of seaports in U.S. energy security," Energy Policy, Elsevier, vol. 115(C), pages 584-615.
    18. Robert Lundmark, 2018. "Analysis and projection of global iron ore trade: a panel data gravity model approach," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 31(1), pages 191-202, May.
    19. Liu, Jian & An, Rui & Xiao, Rongge & Yang, Yongwei & Wang, Gaoshang & Wang, Qian, 2017. "Implications from substance flow analysis, supply chain and supplier’ risk evaluation in iron and steel industry in Mainland China," Resources Policy, Elsevier, vol. 51(C), pages 272-282.
    20. Zhao, Laijun & Cui, Hongxin & Qiu, Xiaoyan & Wang, Xiaoli & Wang, Jiajia, 2013. "SIR rumor spreading model in the new media age," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(4), pages 995-1003.
    21. Raja Kali & Javier Reyes, 2007. "The architecture of globalization: a network approach to international economic integration," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 595-620, July.
    22. Hu, Xiaoqian & Sun, Boxue & Wang, Chao & Lim, Ming K. & Wang, Peng & Geng, Xinyi & Yao, Cuiyou & Chen, Wei-Qiang, 2023. "Impacts of China’s exports decline in rare earth primary materials from a trade network-based perspective," Resources Policy, Elsevier, vol. 81(C).
    23. Wang, Xingxing & Li, Huajiao & Zhu, Depeng & Zhong, Weiqiong & Xing, Wanli & Wang, Anjian, 2021. "Research on global natural graphite trade risk countermeasures based on the maximum entropy principle," Resources Policy, Elsevier, vol. 74(C).
    24. Hao, Xiaoqing & An, Haizhong, 2022. "Comparative study on transmission mechanism of supply shortage risk in the international trade of iron ore, pig iron and crude steel," Resources Policy, Elsevier, vol. 79(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kang, Xinyu & Wang, Minxi & Chen, Lu & Li, Xin, 2023. "Supply risk propagation of global copper industry chain based on multi-layer complex network," Resources Policy, Elsevier, vol. 85(PA).
    2. Yan, Jingjing & Guo, Yaoqi & Zhang, Hongwei, 2024. "The dynamic evolution mechanism of structural dependence characteristics in the global oil trade network," Energy, Elsevier, vol. 303(C).
    3. Hübler, Michael, 2016. "A new trade network theory: What economists can learn from engineers," Economic Modelling, Elsevier, vol. 55(C), pages 115-126.
    4. Zhou, Xuanru & Zhang, Hua & Zheng, Shuxian & Xing, Wanli & Yang, Hanshi & Zhao, Yifan, 2023. "A study on the transmission of trade behavior of global nickel products from the perspective of the industrial chain," Resources Policy, Elsevier, vol. 81(C).
    5. Wang, Chao & Huang, Xia & Hu, Xiaoqian & Zhao, Longfeng & Liu, Chao & Ghadimi, Pezhman, 2021. "Trade characteristics, competition patterns and COVID-19 related shock propagation in the global solar photovoltaic cell trade," Applied Energy, Elsevier, vol. 290(C).
    6. Zongning Wu & Hongbo Cai & Ruining Zhao & Ying Fan & Zengru Di & Jiang Zhang, 2020. "A Topological Analysis of Trade Distance: Evidence from the Gravity Model and Complex Flow Networks," Sustainability, MDPI, vol. 12(9), pages 1-17, April.
    7. Wang, Xingxing & Li, Huajiao & Yao, Huajun & Zhu, Depeng & Liu, Nairong, 2018. "Simulation analysis of the spread of a supply crisis based on the global natural graphite trade network," Resources Policy, Elsevier, vol. 59(C), pages 200-209.
    8. Fagiolo, Giorgio & Santoni, Gianluca, 2015. "Human-mobility networks, country income, and labor productivity," Network Science, Cambridge University Press, vol. 3(3), pages 377-407, September.
    9. Liu, Litao & Cao, Zhi & Liu, Xiaojie & Shi, Lei & Cheng, Shengkui & Liu, Gang, 2020. "Oil security revisited: An assessment based on complex network analysis," Energy, Elsevier, vol. 194(C).
    10. Shao, Liuguo & Kou, Wenwen & Zhang, Hua, 2022. "The evolution of the global cobalt and lithium trade pattern and the impacts of the low-cobalt technology of lithium batteries based on multiplex network," Resources Policy, Elsevier, vol. 76(C).
    11. Wang, Xingxing & Wang, Anjian & Zhong, Weiqiong & Zhu, Depeng & Wang, Chunhui, 2022. "Analysis of international nickel flow based on the industrial chain," Resources Policy, Elsevier, vol. 77(C).
    12. Wang, Yue & Liu, Guwang & Zhang, Yan & Guo, Xiaoqian & Guo, Shaobo, 2024. "The impact of the evolution of the iron raw material trade pattern on the national economy: The B&R perspective," Resources Policy, Elsevier, vol. 89(C).
    13. Hao, Xiaoqing & An, Haizhong & Jiang, Meihui & Sun, Xiaoqi, 2024. "Supply shock propagation in the multi-layer network of global steel product chain: Additive effect of trade and production," Resources Policy, Elsevier, vol. 89(C).
    14. Chakrabarti, Anindya S., 2018. "Dispersion in macroeconomic volatility between the core and periphery of the international trade network," Journal of Economic Dynamics and Control, Elsevier, vol. 88(C), pages 31-50.
    15. Jin, Pengfei & Wang, Saige & Meng, Zheng & Chen, Bin, 2023. "China's lithium supply chains: Network evolution and resilience assessment," Resources Policy, Elsevier, vol. 87(PB).
    16. Zhang, Shuai & Yang, Dewei & Ji, Yijia & Meng, Haishan & Zhou, Tian & Zhang, Junmei & Yang, Hang, 2024. "Spatio-temporal patterns and cascading risks of embodied energy flows in China," Energy, Elsevier, vol. 298(C).
    17. Fan, Ying & Ren, Suting & Cai, Hongbo & Cui, Xuefeng, 2014. "The state's role and position in international trade: A complex network perspective," Economic Modelling, Elsevier, vol. 39(C), pages 71-81.
    18. Ren, Bo & Li, Huajiao & Wang, Xingxing & Shi, Jianglan & Ma, Ning & Qi, Yajie, 2022. "The flow of embodied minerals between China's provinces and the world: A nested supply chain network perspective," Resources Policy, Elsevier, vol. 78(C).
    19. Alexander, D.W. & Merkert, R., 2021. "Applications of gravity models to evaluate and forecast US international air freight markets post-GFC," Transport Policy, Elsevier, vol. 104(C), pages 52-62.
    20. Abhijit Chakraborty & Tobias Reisch & Christian Diem & Pablo Astudillo-Estévez & Stefan Thurner, 2024. "Inequality in economic shock exposures across the global firm-level supply network," Nature Communications, Nature, vol. 15(1), pages 1-8, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:95:y:2024:i:c:s0301420724005245. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.