Indonesia’s nickel smelter association FINI is forecasting nickel ore demand from domestic smelters next year to reach around 340 million to 350 million metric tons, its chairman Arif Perdana Kusuma said on Wednesday.

He said the demand outlook represents an annual increase of around 40 million to 50 million tons, with new production capacity expected to come online next year.

Indonesia, which has the world’s largest nickel ore reserves, has announced plans to slash mineral production quotas next year to prop up prices and increase government revenue. Details have not yet been disclosed.

The policy may cause ore shortages for smelting companies and forced them to import from elsewhere, Arif said.

FINI estimated that around 15 million tons of nickel ore were imported from the Philippines in 2025, with domestic ore production so far reaching only around 85% of the approved quota for the year.

“Nickel ore imports will be the main balancing mechanism. Imports have the potential to increase to around 50 million tons (in 2026),” he said in a text message.

Ore will likely come from places such as the Philippines, New Caledonia or the Solomon Islands, although not all of the demand will be met by imports, due to higher costs and logistical challenges, he said.

Some smelters may be forced to reduce their refining capacity by around 15% to 18%.

Global nickel prices have strengthened on expectations that ore output in Indonesia could be slashed.
Source: Reuters