INFOGRAPHIC: Indonesia's shifting policies drive market volatility

Indonesia's status as the world's dominant nickel producer has given the nation massive influence on the nickel market.

Over the past year, developments in Indonesia's nickel sector have largely driven volatility in global nickel prices. The London Metal Exchange nickel cash price hovered around $17,000-$19,000/mt earlier in 2026, up from an average of $15,171.13/mt in 2025, as the country moved to reduce production following a prolonged slump driven by oversupply.

However, prices recently retreated amid speculation that Indonesia would ease production limits, as several nickel processing facilities face pressure from an ore shortage as well as higher costs on inputs such as sulfur, a key material in extracting nickel from ore.

Indonesia rose as a nickel juggernaut after a 2020 nickel ore export ban sparked predominantly Chinese investments into domestic downstream processing. Indonesia produced 66.6% of the world's mined nickel in 2025, and its market share is expected to remain around that level in the years to come, according to S&P Global Market Intelligence data.