“Axis of pragmatism”

It cannot be heard anymore
In the past few weeks one topic has been dominating the headlines, initially in the tabloids in Germany, but then even in more serious publications and media and also abroad. A young humpback whale, while in pursuit of a school of herring swam into the Baltic Sea and became stranded on a sandbank. Really these type of stories mainly grab the headlines in the summer months when news and events are few and far between, also known as the silly season. But it is hard to believe that this was in April and May already when news and social media posts are rapidly following one another.

In Germany during the summer months, there have been crocodiles in excavation lakes, or a killer catfish which was purported to have eaten a dachshund. But this time, it was different. The whale was actually given a name, Timmy, and politicians, including the environmental minister, became involved and also numerous rescuers, and then actual and self-proclaimed experts, as well as millionaires who financed a rescue operation for the whale. The rest is presumably known all too well. It is fascinating how the humpback whale became personified through a name and aroused such emotions and dominated the headlines for weeks.

But why is this being talked about? It could be said that there are enough problems so why bother about some nonsense. Perhaps because of the present worries and problems. The emotional charge and massive feedback by the public was maybe because people have simply had enough of the constant news from crisis areas and of political fraudsters, high and low. People finally just wanted to read, see or hear something different. Quite a few people have even taken to abstaining from newscasts and social media, at least to some extent, so as not to develop anxieties or become depressed.

The whale was finally towed back to the North Sea and released. It was seen blowing two or three times through its blowhole and was then not seen again, or even tracked as the tracker attached to him was not working. And so, the relief and distraction finally hoped for ended in nothing, which is how it had started. But then the worst happened. Only a short time later a whale was found dead near the Danish coast. Even trivial stories do not always end well.

China is also good for self-reflection
At the Finance Symposium 2026 (FSW26) in Wiesbaden, which used to take place in Mannheim, the biggest of its type in Europe with a gathering of leading banks and financiers from Germany and Europe, even a presenter had to admit that out of sheer weariness, he sometimes could hardly be bothered to follow the news. Fortunately, the FSW26 had invited Frank Sieren, an expert with a profound knowledge of China. And this is not just because the media has called him such, but because he has been living and working in China for the last 30 years.

In his keynote speech and the interview which followed, this well-known authority did not just have something to say about China, but, from a distance or more like a traveller between two worlds, he had a lot of thoughts on Germany’s position and the relationship of China to other countries. It would be too much to repeat everything here, but some of his thoughts are worthy of repetition, then they encourage reflection in the best sense of the word and broaden the intellectual horizon.

For example, Sieren is of the opinion that the present division between good and evil in German and European politics is ultimately a hindrance to being able to address our own weaknesses. Here we regularly speak about certain states being the axis of evil, but from the viewpoint of China they would be seen as more the axis of pragmatism. This means that even if certain counties are not really liked, they could, however, still be useful.

Perhaps the Chinese do not really like the mullahs in Iran, and are especially suspicious of the closely bound connection of politics and religion which it sees as disadvantageous to progress, dynamics and economic prosperity. On the other hand, the Chinese do not want the Middle East to be dominated by the USA or an aligned regional power. In line with this, newspapers reported that Trump and Xi had agreed at their meeting in China that the Strait of Hormuz must remain open and should not be controlled by Iran.

Frank Sieren also believes that the Chinese in the meantime do not particularly like Putin anymore, since he was not very honest with China about his intentions in the war in the Ukraine. Yet the Chinese government are not taking any disciplinary measures at the moment against Moscow since it has an extremely long border with Russia and does not want a conflict to tie up resources which are better kept for other purposes. This author hopes not for Taiwan.

China’s simple strategy, according to the China expert, would be, figuratively speaking, to embrace Putin so tightly that he can no longer breathe. On the one hand, the Chinese would not like the Ukraine to become Russian, but they also certainly do not want the country to join the EU and NATO. It would basically be important and make sense to now and again also look at things from a different perspective in order to develop new insights and a better understanding for the aims and situation of the various global political parties.

China’s new world order has often been spoken of. In actual fact, there had been in the past a dominance of the western minority (Europe and USA) over the other countries in the world. As far as economic growth is concerned, it is now the turn of the global South, which also represents the majority of the world’s population. Whilst the South is growing closer together in this time, the ‘West’ is drifting apart.

For example, USA’s protectionism and the EU’s fundamental trade orientation stand in a certain contrast to one another, which is weakening the West and which China can take advantage of. With its own economic interests firmly in view, China is ensnaring the global South with investments in infrastructure and in other areas relevant to the Chinese economy, such as critical raw materials (partly beyond the boundaries of integrity and fairness) while Europe follows a more morally oriented, albeit rather less effective, development aid and policies. Frank Sieren’s talk was certainly worth a visit. Truly enlightening.

Also supported by the renewed stronger industrial production in China and elsewhere, the nickel price over the last four weeks on the London Metal Exchange (LME) could at times continue to firm up. While the nickel price for the 3-months future was at USD 18,200.00/mt in mid-April, a new high of USD 20,000.00/mt has since been reached. This lasted only a very short time as doubts are growing about a speedy end to the USA/Israel – Iran conflict and the reopening of the important Strait of Hormuz through negotiations. At the moment nickel is trading in London at USD 18,500.00/mt, about halfway from the level of USD 17.000,00/mt where it was in April 2026 when the rise began.

The underestimated supply chain behind stainless steel
In our last edition we had already pointed out the risks in the supply of sulphur and sulphuric acid. At the time it was mainly about the impact on the nickel market. In the meantime, however, it is becoming more clearer that there are far more dependencies behind many industrial supply chains than appear to be at first glance.

The war against Iran and the closure of the Strait of Hormuz have not just caused problems in the energy and aluminium markets alone. Supply chains for copper and nickel are also increasingly coming under pressure – and, therefore, ultimately also supply of stainless steel.

One material in particular which normally does not garner much attention is the cause of this: Sulphur. Around a quarter of global sulphur production originates in the Middle East, above all as a by-product of oil and gas production. Since the Strait of Hormuz was closed at the end of February, significantly less sulphur has reached the global market.

The reason that this is relevant to the stainless steel industry is that nickel, in many production processes, cannot be directly extracted from the ore. This is especially the case in the HPAL (High Pressure Acid Leach) systems most common in Indonesian where nickel is leached from the ore by using large quantities of sulphuric acid. According to estimations, 25 to 30 tonnes of sulphuric acid are needed for one tonne of the intermediate product MHP from which nickel and cobalt is later extracted.

Today, Indonesia is the most important nickel producer in the world and imports, however, at the same time about three quarters of its sulphur requirements from the Middle East. Simultaneously, the country also imports sulphuric acid from China. However, China is planning an export ban on sulphuric acid in order to protect its domestic agricultural sector. Sulphur and sulphuric acid are also required in large amounts in fertiliser which is why governments, if in doubt, will prioritise this sector. Turkey has now already introduced export restrictions while India is examining similar measures.

The situation is thus intensified even more. The first Indonesian nickel producers have allegedly already reduced their capacities because sulphur and sulphuric acid are becoming scarce. Unlike than with copper, where production cuts are often only noticeable after a lapse of time, the impact on the nickel market should be felt much quicker.

The rising sulphur prices are also pushing costs massively high. According to estimates the rise in sulphur prices since the beginning of the year has increased the production costs of HPAL nickel in Indonesia by around USD 4,000.00/mt. The total cost base for these producers, therefore, lies between about USD 14,500.00/mt and USD 18,000.00/mt. The higher sulphur prices, and also quite basically the availability of sulphur, have a direct impact, therefore, on the profitability in nickel production and increase the cost pressures along the whole of the supply chain.

This means for the stainless steel industry: Even if demand remains unchanged, the supply of nickel can suddenly lead to shortages because one raw material, otherwise thought of as secondary, is missing. This shows once more how deep and complex industrial supply chains have become in the meantime. Often it is not the actual main raw material that is critical for the availability of a product, but one material which hardly anyone, outside of the sector, has on the radar.

At the same time, the standing of stainless steel scrap in the stainless steel industry is being pushed far more to the forefront. Scrap is not only an important recycling raw material but already contains nickel and other alloy elements, which can be reused. A high availability and an increased usage of stainless steel scrap can, therefore, help to lessen the possibility of shortages in primary nickel.

The mining sector is rediscovering its waste – recycling comes more to the fore
Global energy transition needs enormous amounts of copper and other critical metals. Yet the mining industry is faced with massive challenges: Ore grades in existing mines are declining, new deposits are rare, and the time between exploration, authorisation and development of new deposits often takes many years. Therefore, it is all the more important to make the existing processes more efficient – and to make a revaluation of waste as also a source for raw materials.

A core issue here are the so-called tailing ponds: These are huge settling ponds in which sludge-like residues – known as tailings – are stored following ore processing. Although these residues still often contain valuable metals, so far, they have not been used commercially. Worldwide over the course of decades billions of tonnes of these residues have accumulated.

Companies such as Rio Tinto have already been able to extract metals such as scandium and tellurium from existing waste streams. Others are looking at the redevelopment of old mining sites. For example, Hudbay Minerals in Canada is examining the reuse of tailings from nearly 100 years of mining history, while Hindustan Zinc in India is investing over 400 million dollars in an industrial scale plant to process ten million tonnes residue annually.

As well as such projects for the “second use” of mining waste, technology companies are working on processes which will produce less waste in the future. Glencore Technology is improving its grinding technology in order to save water and to reduce residue. The US company, Allonnia, on the other hand uses microbes which can selectively extract unwanted substances. Even artificial intelligence is playing an increasing role: Digital twins, process optimisation and predictive control systems increase the yield while at the same time costs are reduced.

The industry stands, therefore, just before a quiet revolution, which could turn waste material into valuable resources. The potential is huge – the Fraunhofer-Institute estimates in its study that about 100 million tonnes of copper alone have accumulated in tailing ponds between 1910 and 2010.

But just as the development may seem so promising, the mining industry is still in its infancy in recycling. It remains a long way from the impressively high recycling rates of the stainless steel industry.