Nickel prices continued to be dominated by expectations of tightening nickel ore production quotas (RKAB) in Indonesia for 2026, closing strongly higher after sharp swings. At the start of the week, the market digested previous gains and corrected due to inventory pressure, but mid-week, Indonesian officials reiterated quota reduction targets, strongly stimulating bullish sentiment and driving a robust rebound in nickel prices, with the most-traded SHFE nickel contract hitting the daily limit at its peak during the week.

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This week, the global nickel market experienced a roller-coaster ride. At the start of the week, driven by the core narrative of Indonesia's 2026 nickel ore quotas and coupled with optimistic sentiment over a global macro shift toward looser liquidity, nickel prices extended last week's surge, with LME nickel hitting $18,000/mt and the most-traded SHFE nickel contract approaching 150,000 yuan/mt.

The structural tightness in power supply has become a key bottleneck constraining the implementation of its strategy, and has also fostered competition for power resources between the two highly energy-intensive industries of nickel and aluminum. Although the high electricity consumption of aluminum has led to its capacity release falling short of expectations, against the backdrop of scarce power resources, transferring the power resources corresponding to some NPI capacity to the aluminum sector—achieving an orderly shutdown of the former's capacity and a rational deployment of new capacity for the latter—can not only significantly increase the revenue per unit of power resource, aligning with Indonesia's policy direction of upgrading its industries toward higher value-added activities, but also promote the optimization of its metal industry structure.

Indonesia's Nickel Ore Price Stable, Forestry Task Force Remains Active