Indonesia's Director General of Minerals and Coal, Tri Winarno, said on 28 October that requests for 2027 nickel ore output quotas exceed 500 million tonnes, roughly double the 2026 cap of 250 to 260 million tonnes, according to Shanghai Metals Market (SMM). The figures refer to RKAB applications, the annual production quotas that each miner must have approved by the government. Some companies have yet to submit their applications.
Winarno warned that mining the full requested amount could oversupply the market and push prices lower. The 2026 cap was set by Winarno in July to curb oversupply, according to the state news agency Antara. It has not supported prices.
LME nickel fell to US$14,885 per tonne on 15 October, its lowest cash price of 2026, according to LME data compiled by Westmetall. Shanghai nickel futures closed flat at 118,190 yuan per tonne, according to the source, which does not specify the date. The cap limits the permits miners may receive, not the ore they actually produce.
Indonesia's energy ministry estimated 2026 ore output at about 209 million tonnes in March, below the approved ceiling. The source reports that ceiling as 260 to 270 million tonnes in February, a range that differs from the 250 to 260 million tonnes cited above. Readers should treat the exact ceiling figures as subject to confirmation against primary sources.
According to SMM, high-grade ore sold below Indonesia's government benchmark on 29 October as smelters bought cautiously. The International Nickel Study Group (INSG) raised its 2026 production forecast to 3.87 million tonnes on 13 October, up from 3.72 million tonnes in April. This change turns the previously forecast 32,000-tonne deficit into a 19,000-tonne surplus.
The INSG also forecasts a 70,000-tonne surplus for 2027, as reported by Crux Investor. LME nickel stocks stood at 278,814 tonnes on 28 October 2026. Crux Investor compares this figure with 251,238 tonnes recorded on 27 October 2025, a rise of about 11 percent.
The comparison pairs data from different years, as presented in the source, and the percentage is Crux Investor's calculation based on LME data. Pressure is also visible in refined and semi-processed nickel. The premium on Jinchuan No.
1 refined nickel in China fell 250 yuan to 3,950 yuan per tonne on 28 October, according to SMM. Crux Investor reports that Indonesian producers of semi-processed nickel have seen margins shrink for several months. The Indonesian Nickel Miners Association (APNI), cited by Argus, says its industry needs nickel prices nearer US$18,000 per tonne.
Chinese producers in Indonesia have discussed halving output. Crux Investor reports that Tsingshan, Lygend, GEM and Huayou met on 20 October to discuss the cuts. No output reduction has been officially confirmed.
Crux Investor notes that these groups operate several plants and could idle some lines. Crux Investor also estimates, based on a producer's figure and annualised by Crux, that the lost output from a halving would exceed the forecast 2027 surplus several times over. This is an estimate, not a confirmed figure.
Applications close on 15 November. The 2026 quotas were issued on 10 February. Crux Investor reads this timetable as placing the decision on 2027 quotas in the first quarter of 2027, a reading that has not been confirmed by the government.
According to Crux Investor's analysis, the outcome depends on two factors: the quota the Indonesian government approves for 2027 and whether Chinese producers carry out the output cuts. If approvals are well above the 2026 cap, the INSG surplus forecast would likely stand. An approved quota at or below 260 million tonnes would weaken the case for a lasting surplus, in Crux Investor's view.
Crux Investor's view is that low-cost producers with room to cut output are best placed to withstand the period of low prices. Developers outside Indonesia, which need higher prices to justify new projects, face greater pressure. This commentary reflects the opinion of Crux Investor and does not constitute investment advice.
Sources: Shanghai Metals Market (SMM); Antara; LME data via Westmetall; International Nickel Study Group (INSG); Argus; Crux Investor analysis.
Source: cruxinvestor.com