Date: April 17, 2026

Category: Market Insights / Policy Flash

 Summary

Indonesia has tightened its grip on the global nickel market through two decisive policy actions that fundamentally reshape supply dynamics and cost structures. The government has set the 2026 nickel ore RKAB (work plan and budget) quota at 2.6–2.7 billion wet metric tonnes—a 29% reduction from the 2025 total quota of approximately 3.79 billion tonnes, eliminating about 1.1 billion tonnes of annual supply [8†L6-L9]. Simultaneously, a comprehensive overhaul of the Mineral Benchmark Price (HPM) formula took effect on April 15, 2026, raising nickel reference prices by up to 100%–140% and incorporating cobalt, iron, and chromium into the valuation framework for the first time [9†L19-L23]. These measures mark Indonesia‘s strategic transition from a passive market participant to an active price setter, with the goal of reducing the global nickel surplus from a projected 261,000 tonnes to just 89,000 tonnes through direct supply management [0†L18-L20].

RKAB Quota Reduction: The Largest Supply Cut in a Decade

Indonesia has set its 2026 nickel ore RKAB quota at 2.6–2.7 billion wet metric tonnes, a sharp reduction from the 2025 total quota of approximately 3.79 billion tonnes—representing a cut of about 1.1 billion tonnes, or 29%. This marks the largest annual reduction in nearly ten years [0†L8-L10].

The policy reflects Indonesia's strategic pivot from passive market participant to active market shaper. According to the Indonesian Nickel Miners Association (APNI), the quota reduction aims to compress the global nickel surplus from a projected 261,000 tonnes in 2025 to just 89,000 tonnes in 2026 [0†L18-L20]. The government has also transitioned from a three-year approval cycle to an “annual approval + mid-year adjustment” model, significantly enhancing its control over nickel supply dynamics [0†L26-L27].

As of mid-April 2026, Indonesia's Ministry of Energy and Mineral Resources (ESDM) has approved approximately 90% of the 2026 nickel RKAB quota, with the remaining approvals pending due to incomplete application submissions from mining companies [13†L2-L6]. As of early April, approximately 210 million tonnes had been approved, approaching the annual target [2†L24-L26].

HPM Formula Reform: A New Pricing Paradigm

On April 10, 2026, ESDM signed Ministerial Decree No. 144.K/MB.01/MEM.B/2026, which revised the Mineral Benchmark Price (HPM) calculation rules. The regulation took effect on April 15, 2026 [11†L2-L4]. The reform introduces three fundamental changes:

1. Significant Increase in Correction Factor (CF)

The CF for 1.6% grade nickel ore has been raised from 17% to 30%. For every 0.1% increase or decrease in nickel grade, the CF is adjusted inversely by 1%. This change alone substantially raises the floor price for nickel ore [11†L16-L17].

2. Inclusion of Associated Minerals

For the first time, cobalt (Co), iron (Fe), and chromium (Cr) are explicitly incorporated into the HPM calculation. Cobalt and iron CF are set at 30% (cobalt included when ≥0.05%; iron when ≤35%), while chromium CF is set at 10% [11†L16-L18].

3. Unit Pricing Transition

The pricing unit has shifted from USD per dry metric tonne (DMT) to USD per wet metric tonne (WMT), applicable to nickel ore, bauxite, cobalt, lead, zinc, iron, copper, manganese, chromium, and iron sand [18†L21-L25].

Revised HPM Formula:

*HPM = [(%Ni × CF_镍 × HMA_Ni) + (%Co × CF_Co × HMA_Co) + (%Fe × CF_Fe × HMA_Fe) + (%Cr × CF_Cr × HMA_Cr)] × (1—MC)*

Where MC denotes moisture content (typically 30%–35%) [11†L14-L15].

April 2026 HMA Reference Prices

The April 2026 HMA (Harga Mineral Acuan) reference prices serve as the basis for HPM calculations:

• Nickel HMA: $16,933.57/tonne
• Cobalt HMA: $55,852.86/tonne
• Iron Ore HMA: $1.58/dmtu
• Chromium Ore HMA: $6.37/dmtu [8†L19-L20]

Market Reaction

Market response was immediate and significant across both international and Chinese exchanges.

LME Nickel: LME three-month nickel futures surged by $508/tonne day-over-day to $18,206/tonne on April 14, 2026, while spot prices rose to $17,981/tonne. Within hours of the HPM announcement, prices climbed from approximately $17,090/tonne to $17,680/tonne [15†L3-L5][9†L24-L26]. LME inventories declined by 822 tonnes day-over-day to 279,570 tonnes [15†L5-L6].

SHFE Nickel: Shanghai nickel futures (main contract NI2605) surged 3.91% on April 14, closing at 139,480 yuan/tonne, with trading volume up 14.8% day-over-day [17†L9-L13]. The contract recorded a five-day cumulative increase of 5.22%, and institutions have raised the nickel price support level to approximately 135,000 yuan/tonne [12†L8-L10].

Stainless Steel: Driven by nickel ore policy developments, SS futures continued to probe higher and broke through the year-to-date high, significantly boosting market sentiment and strengthening spot market confidence [16†L9-L14]. Stainless steel social inventory across Wuxi and Foshan continued to destock, edging down 1.8% week-over-week to 961,100 tonnes [16†L5-L8].

Cost and Supply Chain Implications

The policy combination is expected to substantially raise production costs across the nickel supply chain.

For low-grade limonite ore (1.2% Ni, used for HPAL processing), the new HPM price has been calculated at approximately $40.9/wmt—an increase of about 132% from previous market prices [11†L4-L7]. SMM estimates suggest that low-grade ore for stainless steel production saw an HPM increase of approximately 135%, while low-grade ore for battery raw materials increased by approximately 132% [20†L10-L11].

According to SHMET calculations, MHP production costs are expected to rise by approximately $1,860 per metal tonne from the ore price increase alone. When combined with a 14% royalty impact, total cost increases for HPAL lines reach approximately $2,360 per metal tonne [11†L6-L7].

For saprolite ore (1.6% Ni, used for ferronickel/NPI production), the market price currently trades above the revised HPM floor, meaning the direct cost impact is less severe. However, factoring in royalty impacts, miners still face a minimum cost increase of $3–4/wmt, translating to approximately $400 per metal tonne for pyrometallurgical lines [11†L8-L9].

Nickel accounts for approximately 42% of raw material costs in 300-series stainless steel. The HPM-driven cost increase is expected to raise 300-series stainless steel production costs by approximately 15% [12†L17-L18].

Outlook

Looking ahead, several key factors will shape the nickel market trajectory.

Bullish Drivers

The combination of RKAB quota reduction and HPM reform has established a firm cost floor for nickel prices, with the price center of gravity shifting definitively upward. HuaTai Futures has indicated that the full implementation of RKAB reductions could shift global primary nickel from surplus to a deficit of approximately 65,000 tonnes in 2026, providing medium-term upward momentum for nickel prices [17†L14-L16]. APNI Secretary General Meidy Katrin Lengkey has stated that Indonesia is no longer merely following the global market mechanism but has begun actively regulating the balance of supply and pricing [10†L21-L25].

Bearish Risks

Despite strong policy support, significant headwinds remain. Global refined nickel inventories remain elevated, with LME plus SMM inventory totaling approximately 373,500 tonnes as of mid-April—positioned near a 2.5-year cumulative high [14†L14-L16]. Downstream demand remains sluggish, particularly from the battery sector, which has not yet fully recovered [10†L17-L21]. Weak stainless steel demand in key consuming regions may also cap price upside.

Key Downside Risk

A crucial downside risk exists: additional RKAB quota approvals could be triggered if LME nickel prices hit a certain threshold—likely around $20,000/tonne. The government has indicated its willingness to consider limited relaxation through targeted adjustments if prices remain stable, balancing global supply and demand [21†L41-L44][7†L7-L8].

Long-term Implications

Indonesia's strategic repositioning through RKAB supply management and HPM pricing reform represents a fundamental structural shift in the global nickel market. The era of low-cost, unconstrained nickel production has ended. Going forward, miners and smelters with integrated upstream assets and diversified processing capabilities will be best positioned to navigate the new cost environment, while those reliant on spot ore purchases will face mounting pressure [20†L12-L13].

References

1. APNI (Asosiasi Pertambangan Nikel Indonesia). (2026, April 15). Reformasi Formula HPM Berkah Bagi Penambang Nikel, Dongkrak Harga Acuan Hingga 140%. Kontan.co.id. https://industri.kontan.co.id/news/reformasi-formula-hpm-berkah-bagi-penambang-nikel-dongkrak-harga-acuan-hingga-140

2.APNI (Asosiasi Pertambangan Nikel Indonesia). (2026, April 15). Ada Formula Baru, Pengusaha Sebut Harga Acuan Nikel Bisa Naik 140%.  CNBC Indonesia. https://www.cnbcindonesia.com/news/20260415115134-4-726906/ada-formula-baru-pengusaha-sebut-harga-acuan-nikel-bisa-naik-140

3.BigMint. (2026, April 15). *Global: LME nickel rises above $18,000/t on Indonesia policy, macro support*. https://www.bigmint.co/intel/detail/global-lme-nickel-rises-above-18-000-t-on-indonesia-policy-macro-support-36345

4.ESDM (Ministry of Energy and Mineral Resources, Republic of Indonesia). (2026, April 13). *Kepmen ESDM 144/2026 Ditetapkan: Penguatan Tata Kelola Harga Patokan Mineral Logam dan Batubara*. https://www.minerba.esdm.go.id/berita/minerba/detil/20260413-kepmen-esdm-144-2026-ditetapkan-penguatan-tata-kelola-harga-patokan-mineral-logam-dan-batubara

5.HuaTai Futures. (2026, April 15). 印尼镍矿定价改革落地，全球镍供应或从过剩转向短缺？. 163.com. https://www.163.com/dy/article/KQI1UKO205568W0A.html

6.IPOT News. (2026, April 16). Metals – What‘s next for Indonesia Nickel?. https://ipotnews.com/ipotnews/newsDetail.php?jdl=Metals___What’s_next_for_Indonesia_Nickel_&news_id=216399

7.SMM (Shanghai Metals Market). (2026, April 14). Indonesia's ESDM Announces New Nickel Ore HPM Benchmark Price — In-Depth Analysis of Impact on Nickel Prices. https://news.metal.com/pt/newscontent/103855863-Indonesias-ESDM-Announces-New-Nickel-Ore-HPM-Benchmark-Price-In-Depth-Analysis-of-Impact-on-Nickel-Prices