Indonesia’s Nickel Quota Cuts Are Re-tightening the Feedstock Market

Indonesia’s 2026 nickel ore quota has been reported at roughly 260 to 270 million metric tons, down from 379 million tons approved for 2025. At the same time, Indonesian industry expects nickel ore demand from processors to reach about 340 to 350 million tons this year, reinforcing the view that feedstock is becoming more competitive across the market.

That matters because Indonesia remains the central force in global nickel. Reuters reported in January that the country accounts for about 65% of global nickel supply, meaning changes to ore availability in Indonesia can quickly influence sentiment, pricing, and commercial positioning across the sector. Earlier this year, LME nickel also moved higher as the market reacted to expectations of tighter Indonesian output.

A March 6 Reuters report carried by Kitco adds further support to that theme. According to the report, Indonesia’s nickel processing utilization is expected to fall to around 70% to 75% in 2026, down from about 90% in 2025, as lower ore quotas tighten available feedstock. The same report noted that the industry has already started to feel the impact through rising nickel ore prices, with scarcity expected to become more apparent by the end of the second quarter.

This is where the opportunity becomes more important. As ore availability tightens and competition for nickel feed rises, the advantage increasingly shifts toward companies that can secure supply rather than simply observe the market. In a system like Indonesia’s, where licensing structure and access matter, the premium starts to build around commercial positioning, procurement capability, and direct participation in the ore chain. This is an inference from the reported gap between projected ore demand and approved quota levels, together with the forecast decline in processing utilization and reported rise in ore prices.

Why this matters for Nusa Nickel

For Nusa Nickel, this environment reinforces a simple point: tightening feedstock conditions can create stronger demand for companies that are able to participate on both the production side and the trading side of the market.

• Increased demand for nickel feed provides a strategic advantage for groups that can both produce ore and procure additional ore through trading licences. This is the clearest implication of a market where processor demand is running ahead of approved supply.

• Production plus trading creates stronger commercial leverage. When ore becomes more competitive, companies with multiple channels to access and move material are better positioned than those relying on only one part of the chain. This is an inference from the reported tightening in ore availability, lower projected utilization, and rising ore prices.

• Indonesia’s policy direction is increasing the value of in-market execution. Lower quota approvals point to a more disciplined operating environment, which can reward groups already positioned inside the system.
  

The broader takeaway is clear: Indonesia’s nickel market is becoming more strategic at the feedstock level. As ore supply tightens against processor demand, the opportunity strengthens for companies that can do more than simply hold exposure to nickel. It increasingly favors those that can secure, produce, and procure ore within Indonesia’s regulated supply chain.

With Nusa Nickel participating on both the production side and the trading side of the market, we believe the Company is well positioned to benefit from this tightening feedstock environment.