Indonesia's Nickel Production Cuts Send Global Prices Soaring

The Ministry of Energy and Mineral Resources (ESDM) has revealed that national production has a significant impact on global nickel prices, with large-scale reductions or additions in capacity directly influencing market movements.

Director General of Minerals and Coal at the ESDM, Tri Winarno, stated that this sensitivity was evident when a single company announced a major production increase. “I gave an example recently, when one company announced it would increase production by 25 million tonnes, the price immediately dropped by 850 points. That shows how sensitive the price is to our production,” Tri said during the MINDialogue event themed ‘Commodities for the Nation: Strategy for Strengthening Mineral Reserves for Economic Stability and Sovereignty’ on Wednesday.

According to him, this condition demonstrates that changes in Indonesia’s nickel production have a significant influence on the commodity’s price. Conversely, when the government began to control production capacity, prices experienced an increase.

He cited the approval of the 2025 Work Plan and Budget (RKAB) for nickel, which amounted to approximately 415 million tonnes. At that volume, price movements were relatively stable. “From 400 to 417 million tonnes, it seemed like there was no issue. But as soon as we announced that we would manage production capacity, the nickel price rose to US$18,000. That is the sensitivity,” he explained.