Indonesia nickel processing utilization to drop amid lower nickel ore production quota

Indonesia’s nickel industry group FINI on Friday said 2026 nickel processing production capacity utilization in the country could drop to as low as 70% amid a lower nickel ore production quota, while nickel ore imports were expected to surge.

Utilization of nickel processing capacity could drop to around 70% to 75% this year, from around 90% last year, FINI chairman Arif Perdana Kusumah told Reuters.

Indonesia’s nickel processing capacity this year is at about 2.7 million tons for RKEF and HPAL smelters, which would require around 340 million to 350 million wet metric tons of nickel ore.

Nickel ore production quota, known as RKAB, has been set at 260 million to 270 million metric tons, energy ministry official Tri Winarno said.

Indonesia’s nickel ore imports are seen rising to 50 million tons this year compared to about 15 million tons imported last year, according to FINI. About 30 million tons was expected to come from the Philippines.

“There are already companies importing from the Philippines, but only in small quantities until weather conditions improve,” Arif said.

The industry has started to feel the impact of a lower production quota such as rising price of nickel ore.

“The decline in production capacity utilization is expected to begin to be felt at the end of the second quarter of this year, when the scarcity of nickel ore raw materials will begin to be felt,” Arif said.

(By Bernadette Christina; Editing by Martin Petty)