Indonesia nickel quotas cut 34% to 205m wmt: DBS

Penalties run up to IDR6.5b per hectare for illegal forest mining from Dec. 2025.

Indonesia’s latest policy changes on nickel production are likely to ease oversupply in the market and support higher nickel prices, according to DBS Group Research.

DBS said the government has cut approved nickel mining quotas under the RKAB framework by about 34% to 205m wet metric tonnes, down from around 379m wmt.

It also scrapped the previous three-year RKAB system, requiring miners to reapply annually and revoking previously approved quotas for 2026 and 2027.

As an additional enforcement measure, Indonesia introduced fines of up to IDR6.5b per hectare for illegal mining in forested areas, effective from Dec. 2025.

Following the policy announcements, DBS noted that LME nickel prices jumped about 15% to US$17,860 per tonne by 22 January. The brokerage expects the global nickel surplus to narrow to about 209,000 tonnes in 2026, from an estimated 380,000 tonnes in 2025.

On the back of a tighter supply outlook, DBS raised its LME nickel price forecasts by 5%, to US$16,500 per tonne for 2026 and US$17,000 per tonne for 2027.

It said a tighter ore market should benefit nickel miners, particularly state-owned producers, although near-term risks remain from possible delays in RKAB approvals and quota reductions, with approvals likely to be prioritised for integrated smelters.

DBS named Aneka Tambang and Trimegah Bangun Persada as its top picks in the sector and said it has raised target prices across its nickel coverage following the higher price assumptions.