ASIATODAY.ID, JAKARTA – Indonesia expects global nickel prices to stabilize in the range of US$19,000–US$20,000 per metric ton in 2026, following a decisive move by the government to curb domestic production—underscoring the country’s growing role as a price-setter in the global nickel market.
The projection was announced by the Ministry of Energy and Mineral Resources (ESDM) as part of a broader strategy to rein in oversupply that had pushed nickel prices to multi-year lows in 2025. By tightening output from the world’s largest nickel producer, Indonesia aims to rebalance global supply and demand.
Director General of Minerals and Coal at ESDM, Tri Winarno, said the policy was designed to lift prices after a sharp downturn.
“Production cuts are essential to prevent excessive supply. Without intervention, prices would struggle to recover,” Tri said following a parliamentary hearing in Jakarta on January 24, 2026.
Output Cuts to Support Global Prices
For 2026, Indonesia has slashed its nickel production target to 250–260 million tons, down sharply from 379 million tons approved under the 2025 Work Plan and Budget (RKAB). The reduction marks a significant policy shift, signaling Jakarta’s willingness to sacrifice volume to defend price stability.
Mining companies whose production plans have yet to receive approval will still be allowed to operate until March 2026, albeit at a reduced 25% quota, providing a limited transition period for the industry.
The impact of the policy has already begun to surface in global markets. Nickel prices, which plunged to US$14,125 per ton on December 16, 2025, have since rebounded. Data from the London Metal Exchange (LME) shows prices climbing above US$17,000 per ton as of January 22, 2026, after briefly touching US$18,450 per ton earlier this month.
Broader Market Implications
Energy and Mineral Resources Minister Bahlil Lahadalia has also urged large industrial players to source nickel ore from domestic miners, a move aimed at strengthening Indonesia’s internal supply chain while maintaining downstream industrial growth.
A similar supply-management approach is being applied to coal, with Indonesia targeting 600 million tons of coal output in 2026, down from 790 million tons in 2025. The government argues that controlled production is key to sustaining global commodity prices amid volatile demand.
Despite lower output targets, Indonesia remains confident in state revenue performance.
The government has set a non-tax state revenue (PNBP) target of IDR 134 trillion for the mining sector in 2026, exceeding the 2025 target of IDR 124.7 trillion, banking on firmer global prices to offset reduced volumes. (AT Network)
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