PT Weda Bay Nickel, Indonesia's flagship nickel operation, will receive just 12 million tonnes of ore quota this year, down from 42 million tonnes in 2025 — a 71% reduction. Reports of 10-15% capacity maintenance at the mine have added to supply concerns, with LME futures briefly climbing to $19,165/tonne before settling back near $19,000.
The quota cuts and maintenance are part of a broader Indonesian strategy to rebalance the nickel market. The Indonesia Nickel Miners Association suggested a 2026 ore cap of about 250 million tonnes, down from approximately 379 million tonnes targeted for 2025. Macquarie Group raised its 2026 nickel price forecast by 18% to $17,750/tonne on the LME, citing the sharp drop in expected surplus due to tighter quotas.
The raw-material squeeze is already affecting downstream smelters. Some local processing plants are scaling back operations due to ore shortages, creating a bifurcated market where refined metal remains abundant but intermediate products face supply constraints. This has supported nickel prices even as LME inventories remain elevated at 287,550 tonnes.