Over the past few days, Indonesia’s nickel market has reacted to the government’s announcement of the 2026 RKAB (Work Plan and Budget) production quota restrictions. The quota is set at approximately 260–270 million tonnes, a development that has shocked the industry and sparked widespread concerns among operating smelters and planned projects. Stakeholders are increasingly worried that such tight supply levels will be insufficient to meet their long-term production needs.

First, the Indonesian Nickel Miners Association (APNI) stated that the Ministry of Energy and Mineral Resources (ESDM) has agreed to consider revising the 2026 RKAB starting in July. It is believed that the RKAB revision is expected to increase the nickel production quota by 25% to 30%. According to APNI data, domestic smelter demand based on production capacity stands at around 380–400 million tonnes. Given the existing 270 million-tonne RKAB quota and an estimated 23 million tonnes of ore imports from the Philippines, this 30% adjustment is crucial to resolving the country’s ore shortage.

While the possibility of a quota increase has provided some relief to market jitters, a second, more pressing issue has emerged.

According to several media reports, Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has conservatively set the 2026 nickel ore production target at 209.08 million tonnes – a figure significantly lower than the approved 260–270 million-tonne RKAB quota. As stated by Siti Sumilah Rita Susilawati, Secretary-General of the Ministry of Energy and Mineral Resources’ Mineral and Coal Directorate, this strategic cut is intended to preserve national reserves and stabilize global commodity prices.

As a result, the market has suddenly perceived the risk of further quota reductions, triggering turmoil in Indonesia’s market and potentially adding more upward pressure to already surging nickel ore prices.