Market rumors suggest that Chinese-owned producers in Indonesia are considering cutting nickel pig iron (NPI) output by 20% and MHP battery material production by 50% due to profit pressure. However, no official plans have been confirmed.
The Indonesian government appears supportive of production cuts, hoping that lower supply could boost nickel and ore prices and help maintain royalty income. It may also review ore production plans if demand from smelters declines.
At the same time, Indonesia’s policy remains mixed. While it is considering limits on new smelter capacity, it plans to raise the 2026 nickel ore quota to about 290 million tons, up from 250-260 million tons, to secure ore supply for existing smelters.
Nickel prices briefly rose from US$14,885 to US$15,935 per ton on the production-cut rumors on October 22 but later eased to US$15,535 per ton on the 26th. NPI prices in China and Indonesia have also remained stable, indicating that supply has not yet tightened.
If the production cuts are implemented, they could improve market balance and support prices. However, with higher ore quotas and no confirmed cuts, the market outlook will depend on actual production levels in Indonesia and demand from Chinese stainless steel producers.