The Indonesian Nickel Industry Forum (FINI) forecasts that domestic\nprocessed nickel production will fall by 3.5% to 4% in 2026. The decline\nis measured against national output of 2.5 million tonnes in 2025.<\/p>\n
FINI chairman Arif Perdana Kusumah said the forecast was based on\nestimates of current processing activity across Indonesia\u2019s nickel\nindustry. He said processed nickel output would undergo a further\nadjustment in 2026 before new refining projects come on stream.<\/p>\n
\u201cFINI estimates that Indonesia\u2019s total processed nickel production in\n2026 will fall by around 3.5% to 4% compared with 2025 production, which\ntotalled 2.5 million tonnes of nickel,\u201d Arif told CNBC Indonesia on\nWednesday (14 October 2026).<\/p>\n
In 2025, processed nickel production comprised 2.05 million tonnes of\nNickel Pig Iron (NPI), ferronickel (FeNi) and matte. The remaining\n450,000 tonnes came from hydrometallurgical products, namely Mixed\nHydroxide Precipitate (MHP) and nickel sulphate.<\/p>\n
\u201cTotal national nickel production in 2025 reached 2.5 million tonnes\nin the form of intermediate products, comprising 2.05 million tonnes of\nNPI, FeNi and matte, and 450,000 tonnes of nickel in the form of MHP and\nnickel sulphate,\u201d he said.<\/p>\n
The projected decline in 2026 is expected to be temporary, as\nnational production capacity is forecast to rise sharply in 2027. The\nincrease will be supported by the completion of construction and the\nstart of commissioning at high-pressure acid leach (HPAL) processing\nprojects.<\/p>\n
\u201c2027 will see additional production capacity from HPAL-based\nhydrometallurgical projects whose construction will be completed, with\ncommissioning and full operations set to follow soon,\u201d he added.<\/p>\n
The additional HPAL capacity will increase output of MHP, a material\nused in electric vehicle batteries. National MHP capacity, which stood\nat 450,000 tonnes of nickel in 2025, is expected to exceed 900,000\ntonnes by the end of 2027.<\/p>\n
Proposed moratorium on nickel smelters<\/strong><\/p>\n The government is considering a moratorium, or restrictions, on the\nconstruction of nickel refining and processing facilities that produce\nsemi-finished goods. The proposal comes amid a global nickel glut that\nhas driven down international prices.<\/p>\n Energy and Mineral Resources Minister and Coordinating Minister for\nDownstreaming and Energy Transition Bahlil Lahadalia said most operating\nnickel smelters still produce semi-finished materials, accounting for\naround 50\u201360% of output. He said supply currently exceeded market\nrequirements by as much as 2.5 million tonnes, directly affecting\ninternational nickel prices.<\/p>\n \u201cThere is an oversupply, which is why prices are falling. We can\nconsider starting to limit semi-finished industries, perhaps even\nimposing a temporary moratorium, while encouraging industries whose\nproducts are further downstream,\u201d he said on the sidelines of the 2026\nInvestor Daily Summit in Jakarta, as quoted on Wednesday (14 October\n2026).<\/p>\n Bahlil said the government would regulate national production volumes\nto prevent Indonesian mineral commodities from being sold cheaply when\nthe market is saturated. Although installed smelter capacity is\ntheoretically high, actual operating levels would be adjusted in a\nmeasured way in response to global supply and demand.<\/p>\n \u201cEven if installed capacity is, say, 10, while oversupply persists\nproduction may not reach 10. That is what we will regulate. If we keep\naccommodating smelter demand, our prices will inevitably fall,\u201d he\nadded.<\/p>\n Alongside stabilising prices and optimising state revenue, production\ncontrols are intended to ensure the sustainable use of national natural\nresources. Bahlil noted that minerals such as nickel are finite and\ncannot grow back like agricultural or plantation crops.<\/p>\n \u201cIf prices are falling, we should not flood the market and sell our\ngoods cheaply. Nickel and coal cannot bear fruit once extracted. We must\nmanage these resources sustainably for the nation\u2019s future,\u201d he\nsaid.<\/p>",
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