Indonesia, the world's largest nickel producer, said its nickel ore mining quota for 2027 will take account of a global oversupply and could be stricter, a signal that next year's cap may come in below the 290 million to 300 million tons it has just approved for 2026. Prices on the London Metal Exchange kept sliding: LME nickel cash settled at $15,240 a ton on Friday, Oct. 30.

The quota matters well beyond Jakarta. Indonesian ore feeds the nickel pig iron plants that supply China's stainless steel mills and the high-pressure acid leach plants that make battery material for Asian cell makers. Any cut in mine output tends to lift ore costs for smelters in Sulawesi and Maluku, while a loose quota keeps a lid on the LME price that miners from the Philippines to Australia sell against.

What Indonesia's energy ministry said

Tri Winarno, director general of minerals and coal at the Ministry of Energy and Mineral Resources, told reporters on Oct. 29 that the ministry had approved revisions to company work plans (known by the Indonesian acronym RKAB) that bring this year's total ore quota to between 290 million and 300 million tons, Indonesian business daily Kontan reported. The government had started the year with a cap of 260 million to 270 million tons, down from 379 million tons in 2025, Kontan reported in February.

For 2027, Tri said policy could be stricter and the quota could be set below this year's, Kontan reported. He pointed to nickel inventories on the LME and the Shanghai Futures Exchange, which he put at about 750,000 tons of oversupply, according to Kontan. SMM reported that he said the government needs a comprehensive assessment to avoid further increasing Indonesia's ore supply. He also said the government will weigh the raw material needs of domestic smelters against global market conditions. No figure for 2027 has been announced.

Companies have until Nov. 15 to file their 2027 applications. The online window opened Oct. 1 under Ministerial Regulation No. 17 of 2025, and the ministry has up to five working days to evaluate each filing, Mysteel reported. Coal, copper and bauxite producers apply through the same system. Indonesia's coal policy has been moving in parallel: the government recently said it would drop smelter power plants from its coal domestic market obligation.

LME nickel prices and stocks

The exchange data show little relief for producers. LME nickel cash fell 4.4% from $15,935 a ton on Oct. 22 to $15,240 on Oct. 30, according to LME prices published by Westmetall. The three-month contract settled at $15,425. On Oct. 15, cash nickel dropped to $14,885, its lowest settlement of the year in the Westmetall table.

Stocks in LME warehouses have barely moved. They stood at 278,238 tons on Oct. 30, compared with 284,682 tons on Oct. 1. That is a modest draw, and it leaves inventories high by historical standards.

INSG sees surplus widening in 2027

The International Nickel Study Group, an intergovernmental body based in Lisbon, said after its Oct. 12 and 13 meetings that it expects world primary nickel production of about 3.87 million tons in 2026, rising to about 4.07 million tons in 2027. It forecast usage of about 3.85 million tons this year and about 4 million tons next year.

That leaves an implied surplus of 19,000 tons in 2026, widening to 70,000 tons in 2027, the group said. In April the group had forecast a 32,000-ton deficit for this year.

The INSG expects the stainless steel sector to keep expanding through 2027. It also noted that nickel's share of the battery market has grown more slowly than expected because of competition from lithium iron phosphate chemistry, which uses no nickel.

For investors, the gap between those forecasts is narrow enough that Jakarta's quota decision could tip the balance. A 2027 cap set well below this year's revised 300 million tons would bring the market closer to balance; one near current levels would point to the surplus the INSG projects.

The next marker is the Nov. 15 deadline for 2027 work plan applications, after which the ministry starts its review.