Indonesian Processed Nickel Production Forecast to Fall This Year
The Indonesian Nickel Industry Forum (FINI) forecasts that domestic processed nickel production will fall by 3.5% to 4% in 2026. The decline is measured against national output of 2.5 million tonnes in 2025.
FINI chairman Arif Perdana Kusumah said the forecast was based on estimates of current processing activity across Indonesia’s nickel industry. He said processed nickel output would undergo a further adjustment in 2026 before new refining projects come on stream.
“FINI estimates that Indonesia’s total processed nickel production in 2026 will fall by around 3.5% to 4% compared with 2025 production, which totalled 2.5 million tonnes of nickel,” Arif told CNBC Indonesia on Wednesday (14 October 2026).
In 2025, processed nickel production comprised 2.05 million tonnes of Nickel Pig Iron (NPI), ferronickel (FeNi) and matte. The remaining 450,000 tonnes came from hydrometallurgical products, namely Mixed Hydroxide Precipitate (MHP) and nickel sulphate.
“Total national nickel production in 2025 reached 2.5 million tonnes in the form of intermediate products, comprising 2.05 million tonnes of NPI, FeNi and matte, and 450,000 tonnes of nickel in the form of MHP and nickel sulphate,” he said.
The projected decline in 2026 is expected to be temporary, as national production capacity is forecast to rise sharply in 2027. The increase will be supported by the completion of construction and the start of commissioning at high-pressure acid leach (HPAL) processing projects.
“2027 will see additional production capacity from HPAL-based hydrometallurgical projects whose construction will be completed, with commissioning and full operations set to follow soon,” he added.
The additional HPAL capacity will increase output of MHP, a material used in electric vehicle batteries. National MHP capacity, which stood at 450,000 tonnes of nickel in 2025, is expected to exceed 900,000 tonnes by the end of 2027.
Proposed moratorium on nickel smelters
The government is considering a moratorium, or restrictions, on the construction of nickel refining and processing facilities that produce semi-finished goods. The proposal comes amid a global nickel glut that has driven down international prices.
Energy and Mineral Resources Minister and Coordinating Minister for Downstreaming and Energy Transition Bahlil Lahadalia said most operating nickel smelters still produce semi-finished materials, accounting for around 50–60% of output. He said supply currently exceeded market requirements by as much as 2.5 million tonnes, directly affecting international nickel prices.
“There is an oversupply, which is why prices are falling. We can consider starting to limit semi-finished industries, perhaps even imposing a temporary moratorium, while encouraging industries whose products are further downstream,” he said on the sidelines of the 2026 Investor Daily Summit in Jakarta, as quoted on Wednesday (14 October 2026).
Bahlil said the government would regulate national production volumes to prevent Indonesian mineral commodities from being sold cheaply when the market is saturated. Although installed smelter capacity is theoretically high, actual operating levels would be adjusted in a measured way in response to global supply and demand.
“Even if installed capacity is, say, 10, while oversupply persists production may not reach 10. That is what we will regulate. If we keep accommodating smelter demand, our prices will inevitably fall,” he added.
Alongside stabilising prices and optimising state revenue, production controls are intended to ensure the sustainable use of national natural resources. Bahlil noted that minerals such as nickel are finite and cannot grow back like agricultural or plantation crops.
“If prices are falling, we should not flood the market and sell our goods cheaply. Nickel and coal cannot bear fruit once extracted. We must manage these resources sustainably for the nation’s future,” he said.