Since the beginning of 2026, nickel ore prices have risen sharply across the board, driven by expectations of tightening supply. The core catalyst has been intense market concerns that Indonesia's 2026 nickel ore RKAB quota could be significantly cut to 250-260 million tonnes. This propelled LME nickel prices and, consequently, the Indonesian domestic nickel ore benchmark price (HPM). Fueled by precautionary stockpiling, the spot premium for Indonesian nickel ore surged to a high of US $28 to US $32/wmt. Meanwhile, prices for Philippine ore--a crucial supplemental source--followed suit with substantial increases due to reduced rainy-season supply, with FOB prices for Ni1.4% grade ore exceeding US $50/wmt. The CIF offers to China climbed above US $60/wmt, but due to the severe erosion of downstream profits by the prices, the actual market transactions were sluggish.
Source: Mysteel
With the Chinese New Year holiday approaching, Mysteel anticipates that the core focus of the post-holiday nickel ore market will center on the direction of Indonesian government policy. Firstly, the actual pace of RKAB approvals will be a key factor influencing nickel ore prices. Considering that Ramadan in Indonesia this year will last from February 19 to March 20, potentially slowing administrative efficiency, the approval rhythm from late February to early March is particularly critical. If the approval of RKAB continues to lag, the temporary shortage of supply will support the price of ore. If the batch is approved, the bullish expectation may be reduced.
Second, the market is closely monitoring the progress in Indonesia regarding the pricing methodology for cobalt in nickel ore and adjustments to resource tax rates. The timing of any policy announcement, particularly whether it will occur before Ramadan, is also a key focus. Any policy changes aimed at increasing resource value could trigger a new round of cost-driven price increases.
Starting in April, however, with the end of the Philippine rainy season, shipments from key nickel-producing regions like Surigao are expected to see a significant seasonal recovery. If the actual demand from Indonesia and China cannot effectively absorb the incremental supply at that time, the currently exceptionally high Philippine ore prices will face substantial downward pressure.
Finally, the strength of the post-Chinese New Year demand recovery, especially the extent of profit margin restoration across the supply chain, will also influence the sustainability of high ore prices. For the NPI--stainless steel chain, the key lies in whether end-consumption for stainless steel can recover smoothly to enable effective cost pass-through. According to Mysteel, the production of 300-series stainless steel crude steel in February totaled only 1.3399 million tonnes, a decrease of 520,000 tonnes month-on-month (down 27.98%) and 15.63% lower year-on-year. This is mainly due to the approaching Chinese New Year holiday, which significantly increased costs, coupled with planned equipment maintenance leading to annual shutdowns at some mills. For the new energy chain, attention could be on the sustainability of ternary precursor production after the export-rush effect subsides, and the actual ramp-up progress of newly built MHP projects in Indonesia.
In summary, the nickel ore market is expected to experience high-range volatility after the Chinese New Year. At least within the first quarter, policy uncertainty in Indonesia will continue to support ore prices. Entering the second quarter, with the seasonal recovery of the Philippine supply, market focus may shift from expectations to reality. If downstream demand, particularly in the stainless steel sector, cannot sustain the high costs, the industrial chain would adjust through production cuts, putting significant downward pressure on ore prices. In the long term, Indonesia's policy direction aims to enhance resource value, which may significantly influence this cycle's price floor to be notably higher than in previous periods.
Written by Cora Ji, jiruyan@mysteel.com
