22 December 2025 – Indonesia plans to limit nickel ore mining quotas in 2026. Nickel prices react with increases-but are the plans really feasible? Steel demand in India is expected to continue growing, and signs of a recovery are also emerging in Europe for 2026.
Indonesia Plans to Limit Nickel Mining in 2026
As various media outlets report, the Indonesian government is planning to reduce nickel ore production quotas in 2026 from the current 379 million tonnes to 250 million tonnes. The aim is to stabilise prices. On Monday, nickel prices on the Asian SHFE rose sharply by more than 4.5%. On the European LME, prices also climbed back above USD 15,000/MT shortly after the start of trading.
Are Production Cuts Really Feasible?
How sustainable these plans to limit nickel mining in Indonesia actually are remains completely unclear at this point. As recently as last year, local smelters repeatedly struggled with shortages of ore and even had to resort to imports on several occasions. Whether the Indonesian government will be able to withstand the expected political pressure from influential smelters and processors remains to be seen.
At present, it is still expected that there will continue to be an oversupply of nickel in 2026 as well.
Steel Demand Expected to Continue Growing
According to a recent analysis by Fitch Ratings, demand for steel is expected to grow moderately in 2026. For Europe in particular, demand growth of almost 4% is anticipated.
Steel Demand in India Continues to Boom
The strongest growth, however, is expected to come from the booming steel market in India. There, analysts expect demand to grow by 9-10% to around 165 million tonnes of steel.
India’s rapidly growing economy and expanding population still have significant catch-up potential in terms of per-capita steel consumption compared with other industrialised nations. While around 250 kg of steel per person per year are consumed in the EU, estimates for India in 2025 put the figure at just over 100 kg. According to current figures from the Indian government, this demand is expected to rise to almost 160 kg per person by 2030 (255 million tonnes per year).
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