Nickel prices surged late last year after Indonesia announced plans to slash ore production by a third in 2026 – but analysts at Panmure Liberum are urging caution.
The move would see output fall by 34% from 2025’s level of 379 million tonnes. Given that Indonesia accounts for over 60% of global mined supply, the initial announcement triggered a sharp rally in prices, with nickel jumping 10–15% in a single day.
But Panmure analyst Tom Price says investors shouldn’t get ahead of themselves. “This same government called for a cut to locally mined nickel this time last year, but nothing happened,” he wrote.
“We need to see some evidence first, before we start throwing around our nickel model.”
The Indonesian government’s goal is to support global nickel prices and protect tax revenues from its vast mining and export industry.
While the proposed cuts are substantial, the lack of follow-through on previous pledges has left analysts wary.
Nonetheless, the implications could be significant.
A genuine reduction in Indonesian ore supply would tighten the global balance at a time when several major producers are scaling back; BHP has shuttered its Ni-West project, Anglo American has exited nickel mining, and Glencore has reduced output.
Panmure Liberum hasn’t adjusted its official forecasts but laid out a scenario showing the impact of a 34% cut. For now, the firm is watching for signs that policy turns into practice.
