Key Moments
- LME nickel traded at $17,835 a tonne as of 6:45 a.m. London time, after briefly touching $17,910.
- Indonesia set 2024 nickel ore quotas at 260 million to 270 million tonnes, well below the 379 million tonnes targeted for 2025.
- Weda Bay Nickel’s ore quota was cut to 12 million tonnes for this year from 42 million tonnes in 2025, prompting the operator to seek a revision.
Nickel Prices Climb on Indonesian Supply Action
Nickel prices advanced for a fourth consecutive session on Wednesday after Indonesia ordered a sharp reduction in output from the world’s largest nickel mine, a move designed to tighten global supply and support prices.
Nickel on the London Metals Exchange rose 2% to $17,835 a tonne as of 6:45 a.m. London time, having earlier reached $17,910. The contract has now gained more than 20% since mid-December, supported by speculative inflows and escalating geopolitical risks.
Indonesia Adjusts Nickel Ore Quotas
Indonesia intends to issue production quotas totaling 260 million to 270 million tonnes of nickel ore this year, according to Bloomberg. That range is slightly higher than a previous estimate of 250 million to 260 million tonnes, but remains significantly below the 379 million tonnes targeted for 2025.
The government allocates production via annual mining permits, known locally as RKABs, and retains the ability to change permitted volumes during the year.
| Nickel Ore Quotas | Volume (million tonnes) |
|---|---|
| Earlier 2024 estimate | 250 – 260 |
| Current 2024 plan | 260 – 270 |
| 2025 target | 379 |
Weda Bay Nickel Hit by Steep Quota Reduction
Weda Bay Nickel, located on Halmahera in North Maluku, received a 12-million tonne ore quota for this year, compared with 42 million tonnes in 2025. The operation is owned by Tsingshan Holding Group, France’s Eramet and Aneka Tambang.
Eramet confirmed the lower allocation and stated it will seek a revision, while Indonesia’s Energy and Mineral Resources Ministry indicated that quotas are still under review.
The reduced quota significantly affects Weda Bay’s expansion plans. The mine had intended to lift output to more than 60 million tonnes of ore to supply a nearby industrial park. Instead, it has been importing substantial quantities of ore from the Philippines to compensate for tight domestic availability.
Indonesia’s Strategy to Support Prices
Officials in Indonesia are acting to contain a persistent global surplus after the country’s production rose to around 65% of worldwide nickel supply, contributing to a two-year downturn in prices and forcing higher-cost producers in Australia and New Caledonia to halt operations.
Nickel is a key input for stainless steel and electric-vehicle batteries. However, demand from the battery segment has been softer than anticipated as some producers move toward chemistries that do not use nickel.
Forecasts Respond to Tighter Outlook
In January, Macquarie Group increased its 2026 nickel price projection on the LME by 18% to $17,750 a tonne. The firm cited a significant reduction in the expected surplus tied to Indonesia’s stricter quota regime.
| Nickel Price Metric | Value |
|---|---|
| Current LME nickel price (as of 6:45 a.m. London) | $17,835/tonne |
| Intraday high | $17,910/tonne |
| Macquarie 2026 forecast | $17,750/tonne |
Coal Sector Also Faces Output Cuts
Indonesia is similarly tightening conditions in the thermal coal market. Mining quotas for the world’s largest coal exporter are set to decline by nearly 25% from the previous year.
The Indonesian Coal Mining Association warned that the reduction may lead to closures at some mines and force international buyers to seek replacement supplies elsewhere.
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