What makes something a commodity: How to read a tile
Understanding Commodities / Module 1: What makes something a commodity Part 5 of 5How to read a tile
Each tile carries a few compressed numbers: producer concentration, by-product share, EU supply risk and importance, recycling input rate and reserve life. Two more colour modes, critical-list count and five-year price change, need no decoding. This part explains how each is built and what it cannot tell you, then reads three tiles end to end.
5.1 Producer concentration: the HHI squares the shares
The Herfindahl-Hirschman Index adds up the squared market shares of every producer. With shares in per cent, a monopoly scores 10,000 and a market of many tiny producers approaches zero. Squaring weights large players heavily; Tilton and Guzmán find it closely correlated with the simpler four-firm ratio.
The table computes the HHI across countries, not firms, from 2024 output. Take copper. Chile mined 24.0 per cent, DR Congo 13.5, Peru 11.9, China 8.0, the United States 4.6 and Russia 4.6. Squared, these give 577, 183, 143, 65, 21 and 21, about 1,010, and the long tail of small producers adds the rest of the tile's 1,089. Gallium is the other extreme: World Mining Data, the tile's source, gives China 98.7 per cent of 987 tonnes in 2024, which alone squares to 9,738 (tile: 9,739). USGS puts 2024 output lower, at 848 tonnes, with the same Chinese share. Cobalt, with DR Congo at 74.5 per cent, reads 5,706.
The tile calls a score below 1,500 unconcentrated, 1,500 to 2,500 moderately concentrated and 2,500 or more highly concentrated; the colour scale saturates at 5,000. These are the 2010 US merger-guideline cut-offs, and Nassar and colleagues use the same 2,500 line for country shares. But merger thresholds were written for firms in one market and have shifted: the 1982 guidelines Tilton and Guzmán describe used 1,000 and 1,800. A country HHI measures exposure to one government, strike or drought, not market power; treat the bands as conventions.
Three cautions apply. Country concentration is not firm concentration: copper's four largest firms held only 34.5 per cent in 2013, but in niobium one firm, CBMM, held 80 per cent. The stage matters: China mined about 8 per cent of the world's copper but, by USGS estimates, refined 14 of 29 million tonnes in 2025, about 48 per cent. And a high HHI shows an ability to restrict supply, not an incentive, which depends on demand elasticity and how fast rivals can enter. Tilton and Guzmán treat a low firm-level HHI as strong evidence against market power; a low country HHI cannot show that, since one firm may mine in many countries.
5.2 By-product share and EU supply risk
The by-product share on a tile is Nassar, Graedel and Harper's companionality: the percentage of primary production obtained as a companion of a host metal, mostly for 2008, read approximately from their periodic-table figure. Above about 50 per cent, supply depends mainly on another market. Gallium scores 95, from alumina refining. Indium (95) depends on zinc, tellurium (95) on copper, cobalt (85) on copper and nickel, palladium (95) on platinum and nickel. Copper (15) and iron ore (5) are hosts.
Read capacity alongside the share. USGS puts 2025 world gallium output at about 900 tonnes against capacity of about 1,700, and gallium in bauxite resources at over a million tonnes. The constraint is not geology but whether alumina refiners install and run recovery circuits.
The EU supply risk score comes from the EU's 2023 criticality assessment. It starts from supply concentration, an HHI weighted by the governance of producing countries, computed for global supply and for the EU's actual sources and blended by EU import reliance. Trade restrictions raise it; substitution and recycling lower it. Economic importance measures the value added of the EU sectors using the material, corrected for substitutes. A material is critical if supply risk is at least 1.0 and importance at least 2.8.
Gallium scores 3.9 for supply risk and 3.7 for importance: critical. Cobalt scores 2.8 and 6.8. Copper's importance is 4.0 but its supply risk only 0.1, so it fails the score test; it is listed only because the Critical Raw Materials Act adds all strategic raw materials, which is why the tile shows it as critical. Tellurium is instructive: 78 per cent Chinese and 95 per cent by-product, yet its supply risk is just 0.3, because the EU's import reliance for it is 0 per cent, so the score uses EU sourcing alone. It is a European view of risk, not a global measure of scarcity.
- Nassar, Graedel & Harper (2015), Science Advances web ↗ · pdf pp. 1-3
- USGS Mineral Commodity Summaries 2026, Gallium web ↗ · pp. 82-83
- European Commission (2023), Study on the Critical Raw Materials for the EU web ↗ · pdf pp. 5-7, 22, 34, 55
- Graedel et al. (2015), Criticality of metals and metalloids, PNAS web ↗ · pdf p. 1
5.3 Recycling input and reserve life
The recycling figure on a tile is the EU's end-of-life recycling input rate: the share of material entering EU production that comes from post-consumer scrap. It is not the share of discarded products that gets recycled. Lead scores 83 per cent, because vehicle batteries are collected and returned. Copper scores 55, aluminium 32 and iron ore 31, through steel scrap. On the colour scale, 60 per cent and above is darkest. Gallium, lithium and potash score 0.
Low scores have two causes. Some materials are spread so thinly through products, or consumed in use, that recovery does not pay. Others are locked in goods still in service. Krausmann and colleagues estimate that global in-use material stocks grew 23-fold over the twentieth century, to 792 billion tonnes in 2010, and that recycling supplied only 12 per cent of inflows to them: a growing stock cannot be fed from the smaller flow of scrap leaving it. Lithium's 0 per cent partly reflects batteries still in service.
Reserve life divides USGS world reserves by current output. For copper, 980 million tonnes over 23 million tonnes of 2025 mine output gives 43 years. That is not a countdown. USGS calls reserves a working inventory, developed only as far as business needs justify. In 1970 world copper reserves were about 280 million tonnes. About 712 million tonnes have been mined since, yet reserves in 2024 stood at 980 million. Tilton and Guzmán explain why: discovery, cheaper technology and higher prices keep turning resources into reserves.
So a short reserve life, such as zinc's 18 years or tin's 21, usually signals little reason to prove up ore far ahead, not imminent exhaustion, and a long one, such as lithium's 128 years, signals large identified deposits. A blank is informative too: USGS does not estimate reserves for gallium, indium or tellurium, because their supply depends on hosts.
- European Commission (2023), Study on the Critical Raw Materials for the EU web ↗ · pdf pp. 34, 48
- Tilton & Guzmán (2016), Mineral Economics and Policy · pdf pp. 66-67, 78
- Krausmann et al. (2017), Global socioeconomic material stocks, PNAS web ↗ · pdf p. 1
- USGS Mineral Commodity Summaries 2026, Appendix C web ↗ · p. 217
- USGS Mineral Commodity Summaries 2026, Copper web ↗ · p. 73
5.4 Reading three tiles end to end: copper, gallium and cocoa
Copper is a base metal and a host, with only 15 per cent of output obtained as a by-product. Mining is unconcentrated (HHI 1,089) but refining is concentrated in China. EU importance is high and supply risk low, yet it is on all three critical lists; 55 per cent of EU input comes from old scrap, and reserve life is 43 years. The price forms on the LME and Comex; the World Bank price was 14,474 dollars a tonne in September 2026, the highest monthly figure since at least 2000, against a ten-year low of 4,472. Trade shows where transformation in form happens: Chile and Peru supplied 31.5 and 21.2 per cent of copper ore exports in 2024, and China took 63.2 per cent.
Gallium is the opposite on every count: HHI 9,739, 95 per cent by-product, 0 per cent recycling input, no reserve estimate and no exchange. Its price follows Chinese policy more than mining. China required export licences from August 2023, banned exports to the United States in December 2024 and lifted that ban for a year in November 2025. The average US import value rose from 277 dollars a kilogram in 2021 to 580 in 2025.
Cocoa is a soft: the EU, by-product and recycling fields are blank, no critical list names it, and other numbers matter. Côte d'Ivoire grows 36 per cent of world output, for a moderately concentrated HHI of 1,748. Trees take about seven years to bear, so high prices draw in supply slowly, and stocks-to-use is the figure traders watch. The World Bank price was 5.92 dollars a kilogram in September 2026, more than double the 2.56 of five years earlier, after a ten-year high of 10.75. For São Tomé and Príncipe, where cocoa was 67 per cent of exports in 2013-17, such swings are macroeconomic.
- USGS Mineral Commodity Summaries 2026, Copper web ↗ · pp. 72-73
- USGS Mineral Commodity Summaries 2026, Gallium web ↗ · pp. 82-83
- World Bank Commodity Price Data (Pink Sheet) web ↗ · September 2026
- UN Comtrade, HS 2603 web ↗ · 2024
- Geman (2005), Commodities and Commodity Derivatives · pdf p. 164
- Radetzki & Wårell (2021), A Handbook of Primary Commodities in the Global Economy · pdf p. 269
See it in the table
K PotashCu CopperAl AluminiumZn ZincNi NickelFe Iron oreSt SteelNb NiobiumPt PlatinumPd PalladiumLi LithiumCo CobaltGa GalliumIn IndiumCheck your understanding
A commodity is produced by three countries with shares of 50, 30 and 20 per cent. What is its HHI?
50² + 30² + 20² = 2,500 + 900 + 400 = 3,800, which is highly concentrated on the tile's scale.Copper's reserve life is 43 years. What does the history of copper reserves suggest about that number?
World copper reserves were about 280 million tonnes in 1970. About 712 million tonnes have been mined since, yet reserves reached 980 million tonnes in 2024, because discovery, technology and prices keep converting resources into reserves.Why is tellurium's EU supply risk score low despite 78 per cent Chinese production and 95 per cent companionality?
The EU score blends global supply with the EU's own sourcing, weighted by import reliance, and adjusts for substitution and recycling. With tellurium's import reliance at 0 per cent only EU sourcing counts, so a globally concentrated by-product can still score low.