A significant shift in Indonesia’s nickel policy has sent ripples through the global market. The Indonesian government plans to revise its nickel ore mining quotas (RKAB) in July 2026, with an expected increase of 25% to 30%. This decision has effectively reversed long-standing expectations of a raw material shortage, causing the previously bullish market sentiment to cool rapidly and putting downward pressure on nickel futures.

Beyond the impact of Indonesia’s production hike, a strengthening US dollar has created additional headwinds for commodities, leaving nickel particularly vulnerable among non-ferrous metals. Market sentiment has officially shifted from "supply contraction" to "expansion expectations." 

While supply remains relatively tight for nickel pig iron (NPI), a key component for stainless steel, prior to the actual implementation of these new quotas, the upward momentum in its pricing has clearly stalled.

Looking ahead, the formal implementation of these increased quotas in July is expected to reshape this year’s supply-demand dynamics. Whether the cost support for stainless steel will erode remains a critical variable for the industry. However, many steel mills believe that until the additional supply officially enters the market, a rapid decline in the current high-cost environment is unlikely.