Flash: Nickel downstream PMI in Feb to fall below 34

Indonesia's RKEF smelter capacity utilisation has fallen to 76% from 84% in 2025 after the energy ministry cut the 2026 nickel ore quota to 260–270 million tonnes — below last year's 320 million tonnes output and FINI's demand estimate of 340–350 million tonnes. FINI chairman Arif Perdana Kusuma said several lines in South and Central Sulawesi are running below 50% capacity; smelters are holding minimal output rather than cold-shutting furnaces, which would take months to restart. A member of Indonesia's National Economic Council said the quota was needed to prevent a record surplus, and pointed to $18,000–$20,000/t as the government's target price corridor — cautioning that a significant overshoot above $20,000 would harm nickel end-users.

Leading Chinese nickel producers are scouting investment opportunities outside Indonesia as tightening policy conditions test the economics of their Indonesian operations. One major stainless steel group is considering a large-scale industrial park in Madagascar covering nickel and other minerals, inspired by its Indonesian model, while a major HPAL operator is in talks to acquire a stake in an undeveloped nickel sulphide project in Tanzania and has made an offer for a stake in an idled nickel operation in New Caledonia. If completed, these would be the first nickel investments outside Indonesia for both groups. Madagascar lifted a 16-year moratorium on new mining permits in January, though it is currently under a transitional military government following a coup last year.