Nickel prices reached their highest level since March this year after Indonesia, the world's largest nickel producer, announced plans to reduce supply to boost prices.
According to CNBC Indonesia, Energy and Mineral Resources Minister Bahlil Lahadalia stated that nickel output will be reduced in 2026 to better align supply with demand. The Southeast Asian nation's nickel production has surged over the past decade, now accounting for nearly 70% of global output. Nickel is widely used in stainless steel and electric vehicle battery manufacturing.
Despite the price surge, nickel remains one of the weaker performers on the London Metal Exchange (LME) this year. Demand from the battery sector continues to disappoint due to the rise of alternative battery chemistries. Despite subdued prices for most of the year, Indonesia's supply has kept increasing, causing LME-tracked warehouse inventories to climb rapidly.
Indonesia's output has now become central to next year's nickel price outlook. The government can control supply by tightening the issuance of mining quotas, locally known as RKABs.
Separately, Reuters reported that Indonesia's government will cut mining production quotas to support commodity prices like coal, Energy and Mineral Resources Minister Bahri Lahadalia said in an interview with local news channel TvOne on Tuesday.
He stated the government aims to ensure mineral commodity prices are “reasonable,” thereby generating more revenue for the state.
“We are cutting production based on RKABs,” Basri said, referring to the annual production plan documents miners submit to the government for approval.
“When prices are favorable, companies can achieve better profits, and the state can collect better royalties and taxes. This is what we are currently working on,” he added.
He highlighted the current slump in coal prices but did not disclose how much quotas for coal or other minerals like nickel would be reduced.
On Tuesday, reports of Indonesia's plan to cut nickel output by 2026 pushed Shanghai nickel prices up over 3%.
Indonesia is the world's largest exporter of thermal coal and nickel products.
Bashir added that production cuts also aim to manage the environmental impact of mining activities. Nickel Prices Hit Nine-Month High
Nickel prices hit their highest level since March this year after Indonesia, the world's largest nickel producer, announced plans to cut supply to boost prices.
Energy and Mineral Resources Minister Bahlil Lahadalia said nickel output would be reduced in 2026 to better align supply and demand, according to CNBC Indonesia. The Southeast Asian nation's nickel production has surged over the past decade and now accounts for nearly 70% of global output. Nickel is widely used in stainless steel and electric vehicle battery manufacturing.
Despite the price surge, nickel remains one of the weaker performers on the London Metal Exchange (LME) this year. Demand from the battery sector continues to disappoint due to the rise of alternative battery chemistries. Despite subdued prices for most of the year, Indonesia's supply has kept increasing, causing LME-tracked warehouse inventories to climb rapidly.
Indonesia's output has now become central to next year's nickel price outlook. The government can control supply by tightening the issuance of mining quotas, locally known as RKABs.
Separately, Reuters reported that Indonesia's government will cut mining production quotas to support commodity prices like coal, Energy and Mineral Resources Minister Bahri Lahadalia said in an interview with local news channel TvOne on Tuesday.
He stated the government aims to ensure mineral commodity prices are “reasonable,” thereby generating more revenue for the state.
“We are cutting production based on RKABs,” Basri said, referring to the annual production plan documents miners submit to the government for approval.
“When prices are favorable, companies can achieve better profits, and the state can collect better royalties and taxes. This is what we are currently working on,” he added.
He highlighted the current slump in coal prices but did not disclose how much quotas for coal or other minerals like nickel would be reduced.
On Tuesday, reports of Indonesia's plan to cut nickel output by 2026 pushed Shanghai nickel prices up over 3%.
Indonesia is the world's largest exporter of thermal coal and nickel products.
Bashir added that production cuts also aim to manage the environmental impact of mining activities.
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