Nickel market plays Indonesia’s numbers game

Nickel market plays Indonesia’s numbers game as prices rally

Nickel market plays Indonesia’s numbers game as traders react to signals from Jakarta.
Nickel prices surged after Indonesia hinted at slowing production growth.
The London Metal Exchange three-month nickel contract climbed sharply since mid-December.
Prices jumped from $14,235 per metric ton to nearly $18,905 by January 14.

Indonesia drives about 65% of global nickel supply, shaping global price trends.
As a result, any policy shift from Jakarta sends strong signals to commodity markets.
Energy Minister Bahlil Lahadalia sparked optimism by promising tighter mining permits.
Consequently, traders priced in a possible end to the recent nickel glut.

However, headline quota cuts do not tell the full supply story.
The government plans to cut mining permits to 250–260 million wet tons this year.
That compares with 379 million wet tons approved for 2025.
Meanwhile, analysts warn that wet tonnage obscures actual nickel units.

Hidden variables behind Indonesia’s nickel supply quotas

Nickel market plays Indonesia’s numbers game because ore data lacks transparency.
Mining quotas use wet tons, which include moisture levels reaching 40%.
Therefore, recoverable nickel content varies widely across shipments.

Macquarie Bank highlights that neither quotas nor production figures see formal reporting.
This opacity complicates accurate forecasting for producers and consumers.
However, real demand data offers some clarity.
Indonesia’s smelters consumed about 300 million wet tons last year.

That figure already fell below the official quota.
It also included imported ore from the Philippines.
World Bureau of Metal Statistics reported 14 million tons of imports in early 2025.
As a result, proposed quota cuts may reduce output less than headlines suggest.

Smelter growth complicates Indonesia’s production strategy

Nickel market plays Indonesia’s numbers game as smelter demand continues rising.
FINI expects ore demand to reach 340–350 million wet tons this year.
That growth reflects new nickel processing capacity across Sulawesi and Maluku.

Indonesia aims to move downstream into nickel pig iron, matte, and battery materials.
However, limiting ore supply risks starving new smelters under construction.
Jakarta faces a balancing act between discipline and industrial growth.

Meanwhile, the government halted approvals for new intermediate smelters last November.
It also cracked down on illegal mining and environmental breaches.
Additionally, officials plan a mid-year quota review as a policy safety valve.
Therefore, annual production targets may still change.

SuperMetalPrice Commentary:

Nickel market plays Indonesia’s numbers game, but volatility will persist.
Indonesia seeks control without derailing its downstream ambitions.
Traders should expect shifting quotas and policy adjustments throughout the year.
Ultimately, nickel prices will follow smelter demand more than headline permit cuts.