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| Nickel |
Indonesian Quota Reductions Tighten Global Nickel Supply
Nickel prices climbed for a fourth consecutive day as Indonesia ordered PT Weda Bay Nickel to sharply cut output. This measure aims to tighten global supply and support higher nickel prices. As a result, LME nickel reached $17,835 per tonne, marking a 20% rally since mid-December amid geopolitical tensions.
Indonesia plans 2026 nickel ore quotas of 260–270 million tonnes, far below the 379 million tonnes target for 2025. Meanwhile, PT Weda Bay Nickel will receive only 12 million tonnes, down from 42 million tonnes planned previously. Consequently, global markets anticipate tighter supply and increased volatility in stainless steel and EV battery sectors.
Market Impacts and Price Forecasts
The quota cut pressures high-cost producers in Australia and New Caledonia, who previously halted operations during a two-year nickel slump. In contrast, some Indonesian mines import ore from the Philippines to maintain local industrial parks. Macquarie Group now forecasts 2026 nickel prices at $17,750 per tonne, reflecting the reduced expected surplus.
In addition, Indonesia curbs thermal coal output by nearly 25%, potentially disrupting international buyers. Therefore, metals and energy markets remain closely linked to regulatory decisions in Indonesia, influencing raw material supply chains globally.
ScrapInsight Commentary
Indonesia’s quota reduction tightens nickel supply, supporting short-term price gains. Higher prices may pressure stainless steel and EV battery sectors. Strategic monitoring of Indonesian mining permits is critical for global raw material planning.
