The Take. In August the nickel tape was trading a rumour. By the end of September the paperwork had arrived: revised quotas approved, laterite ore premiums negative, the limonite benchmark nearly halved. The 2026 cut never reached refined metal, and now it is leaking at the ore level too. For Australian nickel restarts, that is a lid on price, not a tailwind.

What changed

Indonesia set its 2026 nickel ore quota (the RKAB) at 260–270 million wet tonnes, down from 379 million in 2025. The cut was meant to lift prices. When we last wrote, on 30 August, the market was trading reports of quota top-ups that the ministry would not confirm.

On 19 August the energy ministry's Director General of Minerals and Coal, Tri Winarno, said about a dozen nickel companies had received approval for revised 2026 RKABs. He did not give volumes, Mysteel reported. Five days later the nickel miners' association APNI said none of its members had received approvals. Energy Minister Bahlil Lahadalia has confirmed changes but refused to quantify them. "Don't ask me how much it changed," he said on 3 August, as reported by Kabar Nusantara, "because once I say it, prices could fluctuate again."

SMM wrote on 30 September that by late September the ministry had "successively approved revised RKABs". No revised national total has been published, and we are not going to print one.

The ore market answered anyway

SMM's numbers show what a quota leak looks like:

  • Laterite ore premiums turned negative for the first time this cycle.
  • The delivered price for 1.6% ore fell from US$65.8 to US$63.4 a wet tonne between 28 August and 28 September. Its premium over the benchmark (HPM) shrank from US$1.52 to US$0.02.
  • 1.5% ore now trades flat to HPM. 1.4% ore is US$2.03 a wet tonne below it.
  • Ministerial Decree 363.K/MB.01/MEM.B/2026, effective 15 September, cut the 1.2% limonite benchmark from US$44.97 to US$24.89 a wet tonne.

The weather is adding ore too. SMM reports the rainy season is delayed across about 61% of the country, which extends the mining and shipping window. The same drought is cutting demand: SMM reports that water shortages have forced some furnace lines at the IMIP industrial park to curtail output since 22 September. SMM expects the October HPM to fall again.

It never reached the metal

Even before the leak, the cut was not tightening refined nickel. Crux Investor reported that Indonesia imported 11.4 million tonnes of Philippine ore in January–July, against 6.82 million a year earlier. LME stocks rose to 268,314 tonnes in August, and three-month nickel sat near US$16,570/t on 1 September.

The ore shortfall was absorbed by imports and by Indonesian smelters running below capacity. It never showed up as a refined-metal deficit. Now it is being reversed through unpublished approvals.

Canberra has read it the same way

The Resources and Energy Quarterly, out on 2 October, forecasts the nickel market to stay in surplus "until at least 2033", with prices around US$17,000/t in real terms by 2031. Australian nickel export earnings fall from A$1.4 billion in 2025–26 to about A$1.2 billion in 2026–27.

The hard truth

The world's largest nickel ore producer tried a production quota, and its own ore now sells below its own benchmark. Supply discipline means published volumes, enforced and held. This was a cut announced in public and loosened behind closed doors, with the minister declining to give numbers because of what they would do to price.

For Australian restart plans, the planning price is whatever Jakarta tolerates. The REQ's US$17,000 is a reasonable working assumption. A restart that needs much more than that is betting on Indonesian policy, not on nickel.

Opinion and commentary. Facts are sourced above. Not investment advice. Do your own research.