- 2026 target implies 31-34% reduction from 2025
- RKAB quota validity extended until Mar’26
SteelDaily: Indonesia is set to sharply reduce its 2026 nickel ore production target as it shifts towards a demand-based supply management framework to curb global oversupply and support prices. The government plans to set next year’s quota at 250-260 million tonnes (mnt), a 31-34% cut from the approved 379 mnt for 2025, according to the Ministry of Energy and Mineral Resources (ESDM).
Officials said the move will align mining output with actual demand from domestic smelters rather than allow unchecked production growth, marking a strategic shift from volume-driven expansion to tighter supply-demand management aimed at avoiding further price distortions in the global nickel market.
Nickel prices reacted immediately. After hitting a recent high of $18,650/t on 7 January, LME nickel briefly corrected but quickly regained momentum. Prices recovered above $18,000/t and extended gains, with nickel trading more than 5% higher during mid-week sessions ahead of contract rollover, reflecting strong bullish sentiment following Indonesia’s policy signal.
To ensure continuity during the transition, Indonesia will extend the validity of existing RKAB mining quotas until March 2026, while the revised approval system for next year is finalised. Authorities clarified that the quota cut does not imply supply shortages for end-users, as sufficient raw materials will be allocated to meet rising demand for nickel pig iron (NPI) used in stainless steel as well as battery-grade nickel.
Market participants view this shift as a turning point in Indonesia’s nickel policy, signalling a move from aggressive capacity expansion towards price and market stabilisation-a development likely to have a lasting impact on global stainless steel production costs and the battery materials supply chain.
Note: This article has been published in accordance with a content exchange agreement between SteelDaily and BigMint.
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