A curse rather than a blessing

Is the paperless office finished?
The widely circulated regional newspaper, Rheinische Post (RP), recently published in its economic section a short article entitled “ECB sets deadline for banks on cyber defence”. In general, it can be observed that the shift of print media to online services and social media has led to a reduction in editorial content. This is particularly true in the case of national news, which is also available from other sources.

However, this reduction does not only relate to the size of the reports or the number of words, but also to their quality. Nowadays individual research is only made to a limited extent. Often what is now read in the daily newspapers has already been published days before in online media or blogs. Just by its nature, a daily newspaper cannot have the same speed and be as up to date as the internet. However, the quality of reporting should really be a reason to continue reading daily newspapers, even today, while also accessing their online content.

But high-quality journalism costs money, and, with falling subscription numbers and a weaker advertising business, this is certainly lacking. Above all, the younger generation gets its information exclusively digitally from the internet, and sadly, sometimes also only from social media where, due to filters and algorithms, the content which is presented is what is actually desired.

This unassuming article in the RP also shows that, in some areas, analogue technology and formats, which are actually considered “outdated”, can also have advantages. The article states that banks in the Eurozone have been requested by the European Central Bank (ECB) to produce plans, within the next four months, to show how they would counter AI-supported cyber threats. The reason behind this is the growing concern of the regulatory authorities in regard to highly developed artificial intelligence models. In other words, there is the fear that AI could be used to disrupt the core business of banks which is critical to the system. It cannot be imagined what would happen if, all of a sudden, all bank deposits would abruptly vanish.

AI, in the wrong hands, can become a curse instead of a blessing. Quite a simple defence strategy, also practiced by intelligence services when dealing with the most sensitive of data, is to operate the systems independently of the internet, and to continue providing customers with account statements on paper. This would mean that documents would still be used as proof of facts. Whilst this may sound old-fashioned and may not be as efficient as AI-supported, highly interconnected systems, it would, however, be highly effective against AI threats.

It really cannot do bank customers any harm either, to now and again make a print out of their bank accounts. That this is not nonsensical imagination is shown, for example, by the following information, taken from a reliable source, which states that in Germany, operators of fuel depots are required to keep a fax machine available for communication purposes in order to be resilient against disruptions.

Meanwhile, it is currently almost impossible to ‘read’ the nickel market reliably. And this has actually less to do with the erratic developments of geopolitical conflicts and their main players, but more with the dominance of Indonesia as primary nickel producer in the global market. For this reason, developments are summarised once more in detail in the next section. There are new reports on an almost weekly basis, which are not always consistent with those of the previous week or necessarily reflect the logic behind the strategy actually being pursued by the South-East Asian country.

Prices on the London Metal Exchange (LME) are really just a reflection of the situation, which shows that the Exchange is certainly functioning. The LME can hardly be made responsible for the supply structure of nickel. Since our last report in mid-June, LME nickel prices did initially fall lower, after, on the one hand, an apparently fragile ceasefire was agreed between the US and Iran. On the other hand, Indonesian government representatives made new surprising statements which hinted at an increase in supply.

On the 2nd July 2026, a relative low level of USD 16,135.00/mt for the 3 months nickel price was reached. Following the resumption of hostilities and a certain back tracking of Indonesia, nickel recently settled around the level of USD 16,300.00/mt. At the editorial deadline, the nickel price was at USD 16,500.00/mt. although prices of USD 16,750.00/mt had, however, already been seen. On the other hand, the price development which has been observed since May corresponds almost exactly to the old market saying “sell in May and go away”.

This “rule” stems from the idea that investors close their respective positions in late spring in order to take profits, so avoiding a weaker market trend during the summer months. Investors then usually return in autumn, relaxed after the summer months, ready and willing to make new investments. This can lead to a renewal of rising prices. This pattern is, of course, no law, but the result of empirical observations. Therefore, things can also happen differently, or even the same but for different reasons, as nickel demonstrates in the above description.

Indonesia dominates the primary nickel market
Indonesia has established itself as the globally leading primary nickel producer, and the South East Asian country is firmly at the centre of discussions about nickel supply, pricing and policy. The first half year of 2026 has underlined Indonesia’s capability to influence the nickel market, yet the combination of a strong concentration of supply and a growing unpredictability reveals a huge risk in supply, not only for the stainless steel industry.

At the start of the year, the Ministry of Energy and Mineral Resources set Indonesia’s nickel ore quota for 2026 at 260–270 million wet metric tonnes (wmt) – a significant decrease compared to the 379 million wmt in 2025. The cuts to mining quotas have reduced the supply of nickel ore to Indonesian smelters and are likely to reduce the global nickel surplus, bringing the market closer to equilibrium. (Benchmark Minerals)

In mid-2026, rumours have been circulating that the quotas for this year could be increased once more to 360 million wmt, although some officials have denied these rumours. Yet, applications for additional quotas opened on the 1st July and the impact could be significant, even if the quota system remains, in the main, non-transparent. (ING, Bloomberg)

The complete U-turn in the allocation of mining quotas underlines that Jakarta neither hesitates to intervene nor shies away from adjusting ore availability when it considers demand and price conditions as justification. Active and unpredictable interventions have become a firm part of Indonesian nickel policy ever since 2020 when nickel ore exports were banned and, more recently, the length of the nickel ore mining quotas was reduced from three years to one year. Since the supply of nickel continues to be concentrated in Indonesia, the unpredictable political interventions made there have an increasingly huge impact on the global market equilibrium and pricing dynamics.

At the same time as actively controlling the mining quotas, the political decision makers in Jakarta have employed and openly discussed numerous instruments in order to achieve a higher value from the mining industry. Similar to the mining quotas, rumours and frequent updates make the situation difficult to predict. In the first half of 2026 alone, the following measures were implemented or considered at a high level:

• A revised reference price for ore has been introduced in order to take into account the cobalt, chromium and iron content in mined nickel ore. Therefore, the minimum price for saprolite and limonite ore was raised to increase the state’s revenue per tonne mined. (SMM)
• At Presidential level an export tax was under consideration, but for now postponed. (Bloomberg)
• A draft for a special tax on nickel and coal exports was drawn up, but its introduction has been postponed.
• The state centralised export agency Danantara Sumberdava Indonesia (DSI) was established as the sole regulatory body for the export of strategic raw materials, including nickel ferro alloys, whereby all exports are subject to stricter controls. (Reuters)

The strategy of increasing income through the nickel industry and to encourage the further processing to higher value products, is clear and legitimate, if the goal is to improve the general prosperity of the Indonesian people. How this strategy, however, should be implemented is difficult to evaluate or to distinguish.

Frequent changes in political direction and adjustments in supply are making it difficult for the industry to orient itself, and the key question is whether the “always-on” intervention model can be stabilised. At the moment, reliability and predictability, both important for companies and consumers alike, cannot be detected at all.

The Indonesian nickel sector is facing additional pressure from external factors. The blockage (threatened again) of the Strait of Hormuz has shown the dependence on sulphur from the Middle East. Strong rainfalls often disrupt mining operations, while the downstream producers are now also facing competition in the energy sector from the emerging aluminium industry.

Increasing concentration and supply risks underline the strategic value of stainless steel scrap, which is generally highly valued also for its minimal carbon footprint. As a diversified, globally available raw material, it does, however, also offer stability and resilience, since it is not dependent on the politics of individual countries. Therefore, all should be done to ensure that trade with this commodity is not restricted, in accordance with the concept of free trade.

Copper in the age of artificial intelligence: Growth with a question mark
At the moment, artificial intelligence (AI) is regarded as being one of the biggest drivers of growth in the commodity sector. Especially copper is the centre of attention for many market participants. The reason for this is obvious: Data centres require huge amounts of electricity, cables and coolers – all areas where copper plays a key role. In the global race for even more higher-performing AI systems, expectations are growing that there will be a strong increase in copper demand.

Indeed, there are many studies which point to a significant higher demand. According to calculations by S&P Global Market Intelligence, data centres and their corresponding infrastructure consumed around 1.1 million tonnes of copper in 2025. By 2040 this could increase to about 1.5 million tonnes. However, the estimates have a range of just 1.7 million to 2.7 million tonnes, depending on the underlying assumptions – which shows just how uncertain the long-term progress still is at the moment.

Modern AI data centres are especially copper intensive. While a classic crypto data centre requires about 21 tonnes of copper per installed megawatt, the copper intensity of AI training centres in China are around 47 tonnes per megawatt, according to S&P Global. These figures illustrate the considerable potential which many market viewers are attributing to the AI sector.

Yet, there are several factors which could prevent an unlimited positive trend in demand. A major bottleneck is the energy supply. Nowadays, data centres can usually be built within 18 to 24 months. The connection to the mains supply takes a lot longer, however. In the USA between 2018 and 2023, the average waiting time for a power supply connection was around four years. In addition, many places do not already have the necessary electricity generation capacity to supply the AI projects being planned.

An example of how quickly the required limits can be reached is shown by Ireland. Here the number of data centres connected to the national energy network by 2021 rose by more than 20 percent. The load on the energy grid was so big that the network operators have effectively suspended authorisations for new projects for several years. It is only recent that new applications have been allowed once more – however, subject to significantly stricter conditions.

As well as energy supply, the technology development is also influencing future copper demand. The operators of AI data centres are under enormous pressure to continually increase the performance ability of their systems. At the same time, costs, energy consumption and spacial requirements have to be reduced.

Already now certain copper connections between server racks are increasingly being replaced by fibre glass solutions. According to the estimation of S&P Global just this trend alone could lower copper consumption by four to five tonnes per installed megawatt. In view of a typical copper intensity of 30 to 40 tonnes per megawatt in conventional data centres, this would certainly have a significant impact.

The semi-conductor industry is also working on new concepts for a more efficient energy supply. Higher operating voltages allow a far better energy transfer and reduce the need for cables, connectors and other copper components. The aim is to make increasingly more powerful data centres using as few materials as possible.

In addition, the focus of attention should not just be on copper. According to the World Economic Forum modern data centres contain a total of 60 to 70 various minerals and metals per installed megawatt. As well as copper, there is also aluminium, nickel, cobalt, tin, silver and gold, amongst others, and also the strategically important technology metals gallium and germanium.

And it is exactly gallium and germanium where experts see even greater supply risks at the moment than with copper. The introduction of export restrictions from China is the reason for this causing western consumers to face even more challenges.

The AI boom remains, without doubt, an important driver of growth for the commodity markets. Whether, however, the much anticipated explosion in copper demand ensues, depends on a number of technological, infrastructural and regulatory factors. The direction of the copper market is clear – just how quickly the rate of growth will be is not so clear.