Indonesia's Ministry of Energy and Mineral Resources (ESDM) plans to set its 2027 nickel ore quota, known as RKAB, below the revised 2026 level. Tri Winarno, Director General of Mineral and Coal at ESDM, made the comments, which Mysteel reported on October 30. According to the report, ESDM cited two reasons: the global oversupply of nickel metal visible on the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE), and plans by some smelters to cut output by year-end.
No specific figure for the 2027 quota was given. The gap between miners' expectations and the planned cap is large. Miners have applied for more than 500 million tonnes of ore for 2027, roughly double this year's cap, and applications close on November 15.
Prices have weakened in parallel. LME cash nickel stood at USD 14,885/t on October 15, the lowest level of 2026. In the week Mysteel reviewed on October 20, LME three-month nickel closed at USD 15,125/t, down 3.04% on the week.
SHFE nickel closed at 115,330 yuan/t, down 3.34%, after touching a year-to-date low. Earlier in the year, in April, BMI raised its 2026 average nickel forecast to USD 16,600/t, but spot prices are now well below that level. Several factors explain the current softness.
The International Nickel Study Group (INSG) now expects a 19,000-tonne surplus for 2026, reversing its earlier expectation of a deficit, and a 70,000-tonne surplus for 2027. LME inventories were about 278,800 tonnes on October 28, up 11% year on year. On the cost side, Indonesian ore benchmarks were revised down, NPI prices fell, and MHP cash costs dropped to about USD 14,479/t of nickel.
On the demand side, a stronger US dollar following a firm September CPI reading weighed on metals, and downstream buying remained hand-to-mouth. For nickel powder, which is priced off refined nickel plus a premium reflecting grade, particle size and processing, the outlook points in two directions. In the short term, the surplus and soft benchmarks give buyers leverage.
In the medium term, a smaller Indonesian ore quota could tighten the supply chain. Nickel powder is used in powder metallurgy, batteries, electroplating, hard-metal binders and magnetic applications. Long-term contract negotiations for 2027 are starting now, and their timing is more important than usual.
Market participants will be watching several developments: the final 2027 RKAB quota after applications close on November 15, smelter output cuts in Indonesia going into year-end, LME inventory trends and whether USD 15,000/t holds as a floor, and how nickel powder premiums move relative to refined nickel prices. Sources: Mysteel reporting of October 20 and October 30, comments from Indonesia's ESDM, the International Nickel Study Group, BMI, and LME and SHFE price data, as cited in an analysis by Kumar Satyam of ChemAnalyst published on LinkedIn.
Source: linkedin.com