Indonesia's Nickel Quota Review Sparks Price Surge

Indonesia’s Energy and Mineral Resources Ministry (ESDM) has entered a critical approval stage for the 2026 RKAB (Work Plan and Budget) nickel quota revisions. The closure of the application window on July 31 triggered a market rally, with the Shanghai Futures Exchange’s main nickel contract closing at 132,650 yuan/ton, up 1.55%, and spot prices also rising.

Minister Bahlil Lahadalia said the government will adopt a “measured relaxation” of quotas, giving priority to mining firms that pay higher royalties, but did not disclose the scale of any increase. Earlier this year the annual nickel production quota was cut from about 320 million tonnes to 260‑270 million tonnes, below refinery demand estimates. The Weda Bay nickel mine halted production in May after its initial quota was exhausted, and the approval of any quota adjustments is expected in August‑September.

Analysts note that global refined‑nickel supply remains tight, with a shortfall of 1.34 million tonnes in May 2026, while inventory levels provide some buffer. The outcome of Indonesia’s quota decision will likely keep nickel prices volatile in the coming months.