LME WEEK-Indonesia's imports of nickel ore from Philippines to hit record in 2026

By Amy Lv and Lewis Jackson

Oct 21 (Reuters) - Indonesia's 2026 imports of nickel ore from the Philippines are set to rise for a fourth year to a record high, traders and analysts said, as lower mining quotas of the raw material tightened local supply.

The world's largest nickel producer has sharply slashed its nickel ore production quota this year, part of efforts to curb oversupply and bolster prices of the metal that is used in stainless steel and electric vehicle batteries. The move has left local nickel smelters scrambling to secure supply elsewhere to meet production needs.

Total imports from the Philippines in 2026 are projected at between 20 million and 25 million metric tons, according to nine analysts and two traders, amounting to an annual jump of between 30.5% and 63.1%, according to Reuters calculations.

Indonesia's imports of nickel ore from the Philippines in the first eight months of this year have already surged by 65.8% from a year earlier to 13.52 million tons, official data showed.

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"Indonesia's lower mining quota acted as the primary driving force behind its growing nickel ore imports," said Tom Fan, an analyst at consultancy Mysteel.

"Also, falling ore grade there means that one needs more ore to produce the same amount of metal, which to some extent aggravated ore supply tightness."

Jakarta set its nickel ore production quota, known as RKAB, at 260 million to 270 million tons this year, according to nickel miners group APNI, which in August said any additional ore production quotas would likely be selectively granted for smelters that are running low on raw materials.

Mining minister Bahlil Lahadalia reiterated earlier this month that Indonesia will maintain its policy on controlling the nickel mining quota in an effort to support prices.

'A NEW NORMAL'

It is normally rare for nickel-rich Indonesia to procure ore from the neighbouring Philippines.

But delays in mining quota approvals and mine suspensions back in 2023 have since upended the trading flow.

"It would become a new normal thereafter unless Indonesia eases its mining quotas control and the Philippines imposes export restrictions, both of which are unlikely to be seen anytime soon," said Han Jianbiao, an analyst at information provider Zhonglianjin.