Indonesia's Ministry of Energy stated it expects nickel prices to stabilize at $19,000-20,000/t in 2026, confirming a strategic pivot from pure volume growth to active price management using quotas, higher royalties, and environmental enforcement. Indonesia now controls approximately 60% of global nickel output.
The quota reduction immediately boosted LME and SHFE prices. SHFE nickel futures surged more than 4%, with gains across NPI, ferronickel, and stainless steel. Some industry participants argue the quota may still be insufficient for actual demand, estimating a potential ore shortfall of up to 100 million tonnes.
S&P Global notes Indonesia's market share could reach 74% by 2035, cementing its role as swing producer. The nickel market's bipolar structure means high-grade Class 1 and battery intermediates face different dynamics than NPI. Policy enforcement consistency will be the key variable to monitor.