Over the past few days, the Indonesian nickel market has reacted to the government’s announcement of a restricted 2026 RKAB production quota, set at approximately 260–270 million tons. This reduction has sent shockwaves through the industry, sparking widespread concern among both operational and upcoming smelters. Stakeholders are increasingly worried that these tightened supply levels will be insufficient to sustain their long-term production requirements. For the first one, The Indonesian Nickel Miners Association (APNI) has stated that the Ministry of Energy and Mineral Resources (ESDM) has agreed to consider revisions to the 2026 Work Plan and Budget (RKAB) starting in July. It is believed that the RKAB revisions could increase nickel production quotas by 25% to 30%. According to APNI, the domestic smelter demand based on the capacity is around 380-400 million tons, With the existing RKAB quota at 270 million tons and projected imports from the Philippines at 23 million tons, this 30% adjustment is critical to meeting the national ore deficit. This potential for more quota provides some relief to the market, but there is a second, more pressing issue to consider Another media also stated that The Indonesian Ministry of Energy and Mineral Resources (ESDM) has set a conservative nickel ore production target of 209.08 million tons for 2026, a figure notably lower than the approved RKAB quota of 260–270 million tons. According to Siti Sumilah Rita Susilawati of the Directorate General of Minerals and Coal, this strategic reduction is intended to preserve national reserves and stabilize global commodity prices As a result, the sudden perception of even deeper quota cuts has fueled confusion across the Indonesian market, which might further intensifying the pressure from already spiking nickel ore prices. I. Indonesia’s Calculated Nickel Ore Demand in 2026 According to SMM’s latest calculations, the total nickel ore requirement for 2026, which includes the demand from NPI, FeNi, Nickel Matte, and MHP, is estimated at approximately 334 million tons, based on the production estimates of smelter's current condition. This sharp increase is primarily driven by the rapid expansion of MHP production, which utilizes higher volumes of limonite ore. This surge in consumption has intensified the pressure on smelters to secure significantly higher mining quotas. II. Current Update and Understanding The Quota Revision? According to current understanding from the Regulation of the Minister of Energy and Mineral Resources Number 17 of 2025, citing the 11 th Article Regarding the Amendment of Work Approved Quotas in ESDM, it is stated that: Article 11 (1) Holders of an IUP (Mining Business License) for the Exploration stage, holders of an IUPK (Special Mining Business License) for the Exploration stage, holders of an IUP for the Production Operation stage, holders of an IUPK for the Production Operation stage, or holders of an IUPK as a Continuation of Contract/Agreement Operations may submit one (1) application for an amendment to the Exploration stage RKAB or the Production Operation stage RKAB in each current year. (2) The application for the RKAB Amendment as referred to in paragraph (1) shall be submitted after the holders of the Exploration stage IUP, Exploration stage IUPK, Production Operation stage IUP, Production Operation stage IUPK, or IUPK as a Continuation of Contract/Agreement Operations have submitted periodic reports up to the second quarter or no later than July 31st of the current year. SMM observes that RKAB revisions and amendments are standard procedure, as seen in both 2024 and 2025. This year, however, the submission window for revisions is expected to open after June, with a final deadline of July 31st. While the ESDM has not clarified whether the 260–270 million ton target already accounts for these mid-year adjustments, it remains highly likely that these revisions will be sufficient to meet domestic smelter demand. Another Potential Cuts? According to SMM’s further communication with ESDM, the predicted quota for 2026 still remains on 260-270 million tons estimate. Since the further production cuts rumor by ESDM is not in an official setting announcement, it is hereby confirmed that the quota approved of 2026 will not be lower than ESDM’s initial estimate of 260-270 million tons. From SMM's understanding, the target number to be lower than the quota is merely just an estimate of the production target, not necessarily reflecting the actual production numbers. III. Nickel Ore Supply and Demand Given the government’s push to tighten annual quotas, SMM expects this year’s revisions to land at approximately 20%, a more conservative number. Furthermore, nickel ore imports from the Philippines are unlikely to see significant growth compared to 2025, with estimates holding at approximately 19 million tons. This stagnant growth is due to the heavy concentration of Philippine exports to China, coupled with limited domestic mining capacity and a lack of new mining companies . After factoring in import volumes from the Philippines, the nickel ore market is likely to remain in a tight supply-demand balance, especially with potential hurdles like the rainy season slowing down mining operations. Nonetheless, this scenario is much more realistic than the alternative: a massive 50+ million ton deficit that would occur if the total quota were strictly capped at 270 million tons. IV. Conclusion Overall, the signal for significant quota cuts at the start of the year has already triggered a sharp rally in nickel ore prices, which could be seen from the substantial rise in premiums, largely driven by quota reductions at major mining companies and persistent uncertainty among small-to-mid-scale operators. Looking ahead, if the government maintains these restricted levels and fails to approve adequate supplemental quotas, domestic ore prices are poised for further upward momentum, potentially intensifying the cost burden on the downstream smelting sector.

The global strategic resource reserve system is undergoing rapid restructuring, and a resource security battle centered on critical minerals has quietly begun.

When Trump announced the launch of a $12 billion "Gold Reserve Plan" at the White House to procure and stockpile critical minerals such as rare earths, gallium, and cobalt for manufacturers, the China Nonferrous Metals Industry Association (CNIA) was also studying the inclusion of copper concentrates in the national reserves. The global strategic resource reserve system is undergoing rapid restructuring, and a resource security battle centered on critical minerals has quietly begun. In early February 2026, the world's two largest economies almost simultaneously announced strategic reserve plans for critical minerals. The Trump administration officially launched a $12 billion critical mineral reserve project named the "Gold Reserve Plan." This plan aims to establish a 60-day emergency mineral reserve, utilizing $10 billion in loans from the US Export-Import Bank and approximately $2 billion in private capital to procure and stockpile critical mineral resources such as rare earths, gallium, and cobalt. From the EU’s Critical Raw Materials Act setting clear recycling rate targets to the US’s tax incentive policies, a global policy network covering legislation, subsidies, and standards is taking shape. For China, the recycling industry of rare and precious metals is not only a vital component of resource security but also a key link in achieving the "dual carbon" goals and ensuring supply chain autonomy and control.

Poland's central bank plans massive gold purchase despite record prices, potentially pushing bullion to 30% of total national assets.

[SMM Lead Morning Meeting Minutes: Pre-Holiday Market Trading Weakens, Lead Prices Expected to Remain in the Doldrums] The US House of Representatives passed a funding agreement negotiated by President Trump and Senate Democrats. Recently, the lead market has been increasingly influenced by the Chinese New Year atmosphere, with downstream lead-acid battery enterprises successively preparing to suspend operations for the holiday, leading to a decline in trading activity in the lead market...

The US dollar is currently in a period of volatility, and many European Central Bank (ECB) officials are calling for an opportunity to enhance the international status of the euro. For instance, Isabel Schnabel, a member of the ECB's Executive Board, believes that as investors turn to Europe, it is a favorable time to strengthen the global position of the euro. So far this year, investors have been selling off the US dollar, and data shows that the dollar has also been depreciating against other major currencies. At the 31st Dubrovnik Economic Conference held last Saturday (June 7), Schnabel stated that there is currently a certain opportunity to increase the international role of the euro. She added that there are signs that investors are looking to the European continent to diversify their portfolios, which she described as a "positive confidence effect." Prior to this, European policymakers, including ECB President Christine Lagarde, have also indicated that officials are exploring ways to turn the US's attacks on global trade into an advantage for the eurozone. It is worth mentioning that Wall Street investment bank Goldman Sachs has recently expressed optimism about the future trend of the euro. In a report, Goldman Sachs strategists wrote that the US non-farm payrolls data released last Friday aligns with the slowdown trend in the real economy and should weigh on the US dollar for some time. Strategists including Kamakshya Trivedi wrote in a June 6 report, "The depreciation of the US dollar may be entering a new phase, and we still believe this situation will continue." Goldman Sachs has also raised its three-month forecast for the euro-dollar exchange rate to 1.17, its six-month forecast to 1.20, and its 12-month forecast to 1.25, citing the slowdown in US economic activity and a shift in global investors' interests. Previously, the institution's three-month forecast for this currency pair was 1.12, its six-month forecast was 1.15, and its 12-month forecast was 1.20. Is the euro set for a "golden moment"? Last Saturday, Schnabel also mentioned that talks with financial market participants showed that investors are increasingly interested in diversifying their investments and are turning their attention to Europe, "which is another piece of good news." She also pointed out that another reason for the high profile of European markets is the expected increase in public spending on defense and infrastructure in Europe. "In the case of Germany, it has significant fiscal space, and investors are actually very positive to see that Germany has finally abandoned austerity policies." Schnabel emphasized that more investment in Europe has eased financial conditions in the region, "which is another very positive impact."She also proposed the need for a large European bond market to strengthen the euro's global standing and suggested considering joint bond issuance to fund European public goods. In recent weeks, numerous ECB officials have intensively voiced calls to accelerate the enhancement of the euro's international status. At month-end May, President Lagarde stated that Trump's unpredictable policies presented a "golden opportunity" to bolster the euro's role, urging Europe to leverage this moment to claim more financial privileges currently exclusive to the dollar. She noted these shifts "open the door for a 'global euro moment'," emphasizing that politicians should seize this opportunity. Spanish central bank governor Jose Luis Escriva also stressed during a June 8 interview, "The dollar's dominance as the international reserve currency appears to be peaking." Escriva pointed out, "The euro has potential to rival the dollar, particularly if the eurozone maintains macro-economic and institutional stability. With a robust economy and trade volumes surpassing the US, Europe could strengthen the euro's role as a reserve and reference currency in international trade still dominated by the dollar." Bundesbank President Joachim Nagel echoed similar views but cautioned against excessive erosion of dollar influence. Nagel noted on Sunday, "From Europe's perspective, we need to strengthen the euro and make the continent more attractive to foreign investors. Of course, we must also closely monitor the dollar and hope it remains stable."