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...

In this historic bull market for gold, the "gold-buying spree" by central banks worldwide is undoubtedly a key driving force behind the rise in gold prices. Although the true scale of gold purchases by these "central bank moms" remains a mystery, few industry insiders believe they will stop in the future... According to estimates by Goldman Sachs analysts, central banks globally are currently adding roughly 80 mt of gold each month—valued at approximately $8.5 billion at current prices. Most of these purchases are conducted privately and secretly. Data from the World Gold Council also leads to a similar conclusion: Central banks and sovereign wealth funds are currently "sweeping up" approximately 1,000 mt of gold annually, equivalent to at least a quarter of the world's annual gold mine production. A survey conducted by HSBC in January this year among 72 central banks revealed that more than one-third of the respondents plan to buy more gold in 2025, with none intending to sell. During periods of geopolitical tension, gold often serves as a safe haven. Although this buying spree began before US President Trump launched a global trade war, it still underscores the growing concerns of some countries about over-reliance on the US dollar, the world's dominant reserve currency. The scorching rally in gold prices over the past few years has only further increased the allure of the precious metal. A prime example is that, the National Bank of Kazakhstan was among the largest gold sellers among global central banks last year. However, according to Governor Daniyar Akishev of the National Bank of Kazakhstan, the bank has reverted to being a net buyer this year and plans to continue increasing its reserves. Akishev stated, "Gold is often seen as a safe-haven asset, but in the current circumstances, considering all the panic, tariffs, and reshaping of global trade, it has also become an investment asset." Is there a "shortcut" to $6,000? For Goldman Sachs, the belief that the gold-buying spree by central banks will continue is the main reason for the bank's persistence in its forecast of $3,700 per ounce by the end of the year. As of Wednesday's Asian session, spot gold prices were recently trading near $3,365, not particularly far from the historical peak of $3,500 set in April. From the perspective of global central bank activities, after the Russia-Ukraine conflict in 2022 led the US and its Western allies to freeze Russia's foreign exchange reserves, the pace of gold purchases by "central bank moms" worldwide nearly doubled. This move to "weaponize finance" has prompted many central banks to consider diversifying their reserves, while the renewed threat of inflation and speculation that the US government may not be as accommodating to foreign creditors have further highlighted gold's appeal to policymakers. Adam Glapiński, governor of the National Bank of Poland, one of the largest gold buyers in recent years, said, "Gold is the safest reserve asset. It has no direct link to the economic policies of any country, can withstand crises, and can maintain its real value over the long term." Massimiliano Castelli, managing director at UBS Asset Management, which provides strategic advice to many central banks, said, "In addition to the risk of sanctions, earlier this year, speculation that the Trump administration would deliberately pursue a policy of devaluing the US dollar, as well as threats to the independence of the US Fed, have made some institutions uneasy." Castelli said, "Given the threats to the US dollar, its share in international reserves may face a sustained decline—perhaps slightly faster than the pace we have seen in the past few years, as central banks are diversifying into other currencies and gold." That said, with limited issuance of bonds denominated in other currencies, central banks have limited options when seeking diversification. However, the growing inflow of funds into gold has become an inevitable trend and may further support the rally that began in late 2022, when gold prices doubled. According to JPMorgan Chase, even if only 0.5% of foreign-held US assets are shifted into gold in the coming years, it would be enough to drive gold to $6,000 per ounce by 2029. Evy Hambro, head of thematic and sector investing at BlackRock, said, "The gold market is large, but the US dollar market is even larger. Even a small amount of funds flowing from the US dollar market into gold would have a significant impact."