Indonesia Revises Nickel Mining Quota Outlook; Nickel Prices Rebound as Chinese Firms Stick to Existing Strategies

In July 2024, international nickel prices stabilized and rebounded. After falling to an intraday low of USD 16,135 per tonne in early July—the lowest level of the year—the three-month nickel price on the London Metal Exchange (LME) recovered by approximately USD 1,000. Meanwhile, domestic Shanghai nickel futures rose nearly 3% during the month. This recent price rally was primarily driven by shifting supply expectations. Earlier, markets were concerned that Indonesia would significantly increase its 2026 Nickel Mining Work Plan and Budget (RKAB) quotas around mid-year, putting downward pressure on nickel prices. However, the Indonesian government subsequently clarified that it would not substantially raise quotas, instead offering only limited additional allocations to meet reasonable ore demand from smelters. Indonesia’s Ministry of Energy and Mineral Resources reaffirmed that the 2026 RKAB will maintain strict overall volume controls to prevent global oversupply. The total 2026 RKAB quota is expected to be roughly 30% lower than in 2025, potentially reducing global primary nickel supply by 200,000 to 400,000 tonnes. Currently, the stainless steel industry is in its seasonal production and consumption lull, while demand from the new energy battery sector has provided only modest support for nickel—indicating that demand-side factors are not the main driver behind this price increase. Market attention has now shifted squarely to changes in Indonesia’s supply policies. At the same time, Indonesia’s ongoing reforms in export management have further reinforced market expectations of supply adjustments. Regarding claims of “Chinese enterprises withdrawing from Indonesia,” relevant Chinese nickel producers stated such reports are inaccurate. Indonesia’s policies apply equally to all market participants, and Chinese companies continue operating according to their established plans, with no changes to their long-term investment strategies. Their current challenges have shifted from securing resources to managing costs. Additionally, Indonesia’s imports of nickel ore from the Philippines have increased somewhat. However, due to the lower grade of Philippine ore, this incremental supply cannot offset the impact of tighter Indonesian quotas and serves only as a marginal supplement. Companies generally hope that Indonesia will maintain stable and transparent policies regarding RKAB approvals and related regulations, enabling them to optimize operations and advance localization and industrial chain development.