Nickel price rally meets scepticism over Indonesia output cut

Core Viewpoint - Nickel prices experienced a significant surge following Indonesia's announcement to reduce ore production by one-third in 2026, but analysts advise caution due to past unfulfilled commitments by the government [1][2]. Group 1: Indonesia's Production Cuts - Indonesia plans to cut nickel ore production by 34% from 2025's output of 379 million tonnes, which could impact over 60% of the global mined supply [1]. - The government's intention behind the cuts is to support global nickel prices and safeguard tax revenues from its mining and export sector [2]. Group 2: Analyst Perspectives - Analysts at Panmure Liberum express skepticism, noting that previous announcements for production cuts did not materialize, indicating a need for tangible evidence before making investment decisions [2][3]. - Despite the proposed cuts being substantial, the lack of follow-through on earlier pledges has led to a cautious outlook among analysts [3]. Group 3: Market Implications - A genuine reduction in Indonesian ore supply could tighten the global nickel market, especially as other major producers like BHP, Anglo American, and Glencore are also scaling back their output [4]. - Panmure Liberum has not revised its official forecasts but has outlined a scenario reflecting the potential impact of a 34% production cut, emphasizing the need to monitor the situation for actual policy implementation [4].