• Indonesia plans 2026 nickel output cuts to balance supply and demand

• Nickel prices jump as LME inventories surge and quotas adjusted

• Jakarta aims to curb surplus, support prices and limit environmental impact

Indonesia plans to cut nickel production in 2026 to better align supply with demand, Energy and Mineral Resources Minister Bahlil Lahadalia said, as inventories on the London Metal Exchange (LME) have risen sharply this year.

Nickel prices jumped to their highest level since March following the announcement. Spot nickel rose to $16,500 a tonne on Tuesday from $15,800 on Monday, while the three-month LME nickel contract closed up 6.4% on Dec. 30.

In an interview with local television earlier, Lahadalia said the government would adjust production quotas for miners.

Indonesia has sharply increased nickel output in recent years. The metal, used in stainless steel and electric vehicle batteries, saw the country’s global market share rise from 31.5% in 2020 to 60.2% in 2024, according to S&P Global Market Intelligence. By curbing supply, Jakarta aims to reduce the surplus it helped create and support higher prices.

The move echoes similar action by the Democratic Republic of Congo (DRC), which accounts for about 70% of global cobalt production, another key metal for the electric vehicle industry. After doubling output in recent years, the DRC suspended cobalt exports in February 2025 before introducing production quotas in October.

DRC authorities also sought to reduce excess supply and lift prices. While cobalt prices have more than doubled since the start of the year, the full impact of Indonesia’s planned production cut on the nickel market will take months to become clear.

The move is also intended to mitigate the environmental impact of mining operations.

Emiliano Tossou