Indonesian smelters cut output following reduction in nickel ore quota
2026-06-08 10:24:39 [Print]
Indonesia's nickel industry group, FINI, has reported that capacity utilization at rotary kiln electric furnace (RKEF) smelters has fallen to 76%, down from 84% last year, following a reduction in nickel ore mining quotas.
Indonesia's Ministry of Energy lowered the nickel ore production quota for 2026 to between 260 million and 270 million metric tons. This figure is significantly below the 320 million tons produced last year and also falls short of FINI's demand forecast for this year, which stood at 340–350 million tons. The quota cut was driven by persistent oversupply and depressed prices in previous years.
"Several production lines in South Sulawesi and Central Sulawesi have reduced their output to less than 50% of capacity," said Arif Perdana Kusuma, Chairman of FINI, during his speech at Indonesia's Critical Mineral conference on Friday.
Arif explained that smelters are continuing to operate at lower capacity to avoid completely shutting down their furnaces, as a full shutdown would be costly and require several months to restart.
Indonesia's Ministry of Energy lowered the nickel ore production quota for 2026 to between 260 million and 270 million metric tons. This figure is significantly below the 320 million tons produced last year and also falls short of FINI's demand forecast for this year, which stood at 340–350 million tons. The quota cut was driven by persistent oversupply and depressed prices in previous years.
"Several production lines in South Sulawesi and Central Sulawesi have reduced their output to less than 50% of capacity," said Arif Perdana Kusuma, Chairman of FINI, during his speech at Indonesia's Critical Mineral conference on Friday.
Arif explained that smelters are continuing to operate at lower capacity to avoid completely shutting down their furnaces, as a full shutdown would be costly and require several months to restart.
Nickel Ore Philippine 1.3%min CIF China
Unit:USD/mt
China refined nickel producers' number MoM output increase statistics by province by month
Unit: pcs
