Sayin’ It And Doin’ It Are Two Different Things

“Resilience in uncertain times”
Research by the major French bank BNP Paribas expects the global economy to be resilient in the fourth quarter of 2025 despite increased political and geopolitical instabilities. The present weak phase is seen as temporary and not an ongoing trend. This basically very good and optimistic statement cannot, however, be related to all countries and regions and only applies of course in total. To be expected, the situation differs all over the world. The aforementioned global weakness suggests that probably in more rather than fewer countries things are not running too well. Which is actually not really new to hear.

However, it can certainly be ruled out at this point that BNP Paribas wanted to jump to the defence of French President Macron with its analysis. Just the day before publication, the president had once again lost his/another prime minister and the associated government following a vote of no confidence in the National Assembly. In the meantime, a new prime minister has already been appointed and tasked by Macron with forming a government, while bets have presumably already been placed in Paris on how long this government will last.

However, France’s high national debt is a cause for concern, which, according to the EU Commission forecast in February (see the monthly reports from the German Federal Ministry of Finance), will rise to around 115 % of gross domestic product (GDP) for 2025. In 2015, debt was still at 95.6 % of GDP. Due to the political situation, which has been unstable for some time now, it is unlikely that urgently needed reforms will be implemented.

As expected therefore, the rating agency Fitch Ratings lowered France’s long-term credit rating from AA- to A+ on 12 September 2025. However, if comparing France’s debt with that of other major economies, only Germany stands out “positively” at 63.2 % of GDP. The USA is even higher with 126.2 %, Japan is even just under 250 % in relation to GDP. In China, whose statistics should be viewed with caution, debt is said to be between 90 % and 96.3 %, depending on source, which would roughly correspond to the Eurozone’s debt of 89.6 %.

First the performance then the reward
In this context, however, we do not want to join in with the popular politician bashing, as they are of course not to blame for everything. The (high) expectations of voters and the actual willingness of people in individual countries to perform also play an important role in attaining sustainable economic success or failure. Many mature industrialised countries no longer have anything to do with what was once described as performance orientated societies. Instead, it is all about consumption, leisure time, transfers and securing the status quo. Work is an unpleasant side effect. Efforts or going the extra mile is scorned and is felt to be unreasonable. Yet prosperity is primarily based on value creation, and above all also through the input of meaningful, productive work.

The Christian Democratic Party under Helmut Kohl used the slogan “Performance must be worthwhile again” in the 1982 election campaign against the then SPD-led German government. Today, it seems that the willingness to perform must return before this slogan can be used again. And this applies to lazy heirs as well as to second and third generation transfer recipients. Unlike in emerging markets countries, society on average is no longer concentrating on performance. The only question is which politician wants to deliver this uncomfortable news to people and draw the necessary consequences. It is no easy task to reconcile demands on the one hand and declining prosperity on the other if wanting to be re-elected at the next election. It is much easier, but not necessarily better for the country and its people, to increase debt to the limit of what is possible instead of making cuts and reforms.

Deeds must follow words
Over the last few months, nickel prices on the London Metal Exchange (LME) and also the prices of other base metals are reflecting the resilience described by the BNP Paribas. Indeed, the LME Index, consisting of six industrial metals with the following weightings: aluminium (42.8 %), copper (31.2 %), zinc (14.8 %), lead (8.2 %), nickel (2 %) and tin (1 %), has risen by around 10 % since the end of April. The romps of copper have already been factored into this rise. Despite the continuing supply surplus for primary nickel and a rather below-average demand, not only from steel and alloy production but also from battery production, the 3-month nickel futures price on the LME could maintain a range of USD 14,900 to 15,500 since the middle of August. The metal is currently trading at USD 15,400.00/mt.

As Fastmarkets wrote in an article on the 1st August 2025, the introduction of green steel in Europe on the other hand is still going slowly. Above all, the problem is that while purchasers and processors of steel like to talk of green steel and sustainability, they are, however, not prepared to pay more for it. Everyone would like to have sustainability and be environmentally conscious, but please without additional costs. And this is of course a huge problem for steel producers and the upstream value chain in Europe and in other traditional steel countries, because sustainability and decarbonisation are just not to be had for nothing.

The title of a song, which incidentally is also very cool, by Bobby Byrd from 1990 almost perfectly summarises the dilemma: “Sayin’ It And Doin’ It Are Two Different Things”. There are plenty who talk (a lot) about sustainability, environmental protection and the preservation of biodiversity, but, in the best case scenario do hardly anything or nothing or in the worst case even speak with a forked tongue. Therefore, it is more than understandable that Indonesia is now apparently really serious in its efforts to comply with standards and ensure environmental protection.

According to a report by the news service Bloomberg, a taskforce of the Indonesian government has seized (smaller) portions of PT Weda Bay Nickel, the world’s biggest nickel mine, due to infringements of existing permit regulations. Not only PT Weda Bay Nickel, but also the mine’s shareholders and the consumers of nickel ores and other raw materials in the downstream value chain must be prepared for unpleasant questions from the authorities and the public.

In addition to the excessive bureaucracy and directives regarding supply chain transparency and supply chain due diligence obligations for medium-sized companies, which have been rightly criticised, the above example shows the sense and also necessity of rules, transparency and their monitoring when companies disregard laws and generally recognised environmental standards. Otherwise we have the dreaded “green-washing”. For more about the general tightening by the Indonesian government, see also below.

Stainless steel production for Q2 2025
Worldstainless, the World Stainless Steel Association, has just published the melt shop production figures for the 2nd quarter. The global melt shop production in the first half year totalled 31.9 million tonnes stainless steel. Production in Europe fell in Q2 2025 to 1.542 million tonnes, which corresponds to a 4.1 % decrease compared to the previous quarter and 5.1 % compared to the previous year’s quarter. Contrary to this, in the USA there was an increase of 1.1 % and 7.8% respectively compared to 2024, although this is at a significantly lower level of around 560 thousand tonnes.

Even in China production rose further in the second quarter 2025 and reached 10.544 million tonnes, which on its own accounted for 64.5 % of the total production for Q2 2025 of 16.361 million tonnes. Compared to Q1 2025 this is additionally a very strong increase of almost 10 %. In contrast incidentally, the output in Asia fell by 2.2 % compared to the previous quarter. The melting output of the other countries, which include Brazil, Russia, South Africa and the Ukraine, increased by 1.0 %, whereby their share of global production volume totalled just 1.4 %.

Environmental initiative in Indonesia: shutdowns, licence withdrawals and investigations into environmental violations
In view of increasing environmental damage, the Indonesian government is intensifying proceedings against illegal wastewater discharges and uncontrolled nickel mining. With targeted plant closures, the withdrawal of mining licences and other announced inspections, it wants to contain the pollution of rivers, forests and coral reefs.

In the Tangerang regency (Banten province), for example, Environment Minister Hanif Faisol Nurofiq ordered the immediate closure of three companies in the textile, iron smelting and aluminium recycling branches. The suspicion that they have discharged contaminated wastewater into the Cirarab River via pipelines is considered by the government to be a serious environmental offence. The companies have had to suspend operations and their operators are now under criminal investigation. According to the ministry, 23 sites have already been identified in the region where hazardous waste has been unexplainably discharged into the river. Those responsible face prison sentences of three to five years or heavy fines.

Parallel to this, media reports and Greenpeace videos about nickel mining in Raja Ampat (south-west Papua) caused a stir. More than 500 hectares of forest are said to have been cleared on the small islands of Gag, Kawe and Manuran – contrary to current regulations that prohibit mining on these islands. The government temporarily suspended the operation of one mine and announced comprehensive inspections. Minister Nurofiq declared that he would take action against all companies that violate environmental protection regulations and endanger the unique biodiversity of the Coral Triangle.

Shortly afterwards, Energy Minister Bahlil Lahadalia announced that President Prabowo Subianto had finally revoked the licences of four nickel companies in Raja Ampat on the recommendation of his authorities. The companies concerned – PT Nurham, PT Kawei Sejahtera Mining, PT Anugerah Surya Pratama and PT Mulia Raymond Perkasa – had not fulfilled official requirements. With this revocation Jakarta wants to prevent further environmental damage in the UNESCO Global Geopark.

With these measures, Indonesia is sending a clear signal: The protection of natural resources and compliance of environmental standards have priority – violations will be resolutely penalised in future. As reported above, the government is obviously also prepared to include the big players in this initiative. So this is about more than just symbolic politics. This should also have an impact on ore and nickel supply in the medium term.

“Chart of the Month” – without comment
The following chart shows the price difference between the copper price on the New York Commodities Exchange (COMEX) in the USA and the price for copper on the London Metal Exchange (LME), which is a leading reference price for copper in Europe and many other countries of the world.

Press release of 11th September 2025: Extension of credit lines continues the stable support of the dynamic growth strategy of Oryx Stainless in the future
Oryx Stainless Group has extended its existing syndicated credit lines prematurely. The volume of the asset-based financing, which is based on the proven borrowing base concept, totals 110 million Euro. The initial term is three years with an extension option of up to two further years. Furthermore, an increase in the credit volume to up to 130 million Euro is an optional component of the documentation.

The syndicated loan agreement mainly serves the flexible and demand-orientated financing of the current assets of the European Group companies, as well as collateral for commodity hedging business. Oryx Stainless Malaysia, recently put into operation, was added as a new borrower. HSBC Malaysia had already supported the long-term financing of the local investment project.

Asia is, therefore, now another core market for Oryx Stainless along with Europe. Oryx Stainless Thailand, which has been operating successfully in ASEAN for more than 10 years and is, in the meantime, market leader, was initially also financed via the European loan agreement. After reaching the necessary size, an innovative revolving credit facility, now totalling one billion Thai Baht, was implemented in 2020 as part of a club deal with HSBC Thailand and the local Kasikornbank.

The syndicate in Europe, which has remained unchanged for many years, consists of HSBC Germany as sole bookrunner, supported by Commerzbank, DZ Bank and Rabobank as mandated lead arrangers. NRW.Bank and Stadtsparkasse Düsseldorf acted as lead arrangers.

Roland Mauss, CFO of Oryx Stainless, summarises: “HSBC Germany and the Oryx Stainless Group are connected by about twenty-five years of a trusting and successful cooperation. HSBC Germany and the other banks and financing partners have made a significant contribution to the above-average growth and sustainable development of Oryx Stainless, enabling the Group to be one of the global players in the field of stainless steel recycling.”

The CEO of HSBC Germany, Dr Michael Schleef, emphasises: “We are very pleased to once again support the Oryx Stainless Group in the extension of its syndicated credit line and also to support the Group with additional products and services in its further development as a global raw materials supplier. The fruitful co-operation and growth of Oryx Stainless Group shows how much potential the combined strength of HSBC in Europe and Asia can develop.”