Indonesia signals further nickel ore quota cuts as global surplus weighs on prices

Indonesia is signaling a further reduction in its 2027 nickel ore production quota under the government's annual work plan and budget, or RKAB, as global oversupply weighs on prices, Coordinating Minister for Downstreaming and Energy Transition Bahlil Lahadalia said Nov. 2.

Global nickel supply is exceeding annual demand of about 3.5 million metric tons, Lahadalia, who also serves as the energy and mineral resources minister, said at a mining industry event. Nickel prices have fallen below $16,000/metric ton to about $15,800/mt, he added.

"I think the strategy to control supply and demand through the RKAB should also be implemented in nickel," Lahadalia said.

He urged mining companies and other industry participants to hold back on expanding output, warning that some countries could take advantage of low prices by stockpiling Indonesian semiprocessed nickel products and selling them later when prices recover.

Nickel prices were about 5% below the government's Harga Patokan Mineral, or the mineral benchmark price, putting pressure on mining companies, Lahadalia said.

Indonesia will take global market conditions and domestic smelter demand into account when setting its 2027 nickel ore production quota under the RKAB mechanism, Director General of Mineral and Coal Tri Winarno said Oct. 29.

The government is assessing global supply conditions, including an estimated surplus of about 750,000 metric tons reflected in inventories on the London Metal Exchange and the Shanghai Futures Exchange, Winarno added.

Indonesia's revised 2026 nickel ore production quota stands at about 290 million-300 million mt, up from the initial allocation of 260 million-270 million mt.

The country exported a net 10.8 million mt of nickel products from Jan. 1 through Nov. 2, including 4.4 million mt to the top destination China, according to S&P Global Commodities at Sea data.

The country's nickel product exports totaled 15.6 million mt in 2025, with 4.8 million mt shipped to China, CAS data showed.

The government also aims to optimize smelter operations to absorb available raw material supplies and maintain the value of its downstream nickel industry, Lahadalia said.

The country's processed nickel exports reached $25.96 billion through August, Lahadalia added.

Platts, part of S&P Global Energy, assessed nickel sulfate DDP China at 24,700 yuan/mt Nov. 2, unchanged from the previous assessment.