07 January 2026
Nickel Rallies as Supply Constraints Spark a Market Frenzy
Market Commentary
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The Indonesian nickel sector is truly showing its teeth at the start of 2026. Global nickel prices have "soared," hitting a 15-month high at approximately US$18,520 per ton. This price explosion was triggered by the Indonesian government's bold move to slash production quotas in the 2026 RKAB by 34% to combat global oversupply. This strategic policy serves as a powerful signal that Indonesia, as the world's dominant nickel supplier, is fully committed to boosting prices while ensuring the sustainability of national mineral reserves.
Our analysts foresee a much sturdier potential for nickel moving forward, as global supply tightening is now firmly in the hands of the Indonesian government. Although there is a temporary relaxation for companies to continue operations until March 2026, production limits remain strictly enforced to ensure prices do not slide back down. With price trends surging nearly 40% in just three weeks, the market is responding with high optimism, as current price levels are seen as capable of significantly strengthening profit margin structures for mining companies.
This euphoria is clearly reflected on the stock exchange floor, where nickel-related counters are collectively staging an extraordinary rally with highly aggressive daily gains. Several stocks have even successfully hit the upper auto-rejection limit (ARA), reflecting investor confidence that the era of oversupply has ended, making way for a tightening phase that favors producers.
One of the nickel-related stocks recommended by our analysts is PT Vale Indonesia Tbk (INCO). Its future looks incredibly enticing with a BUY recommendation and a target price of Rp7,500. Interestingly, this target price is actually quite conservative as it is based on an old nickel price assumption of US$15,500 per ton, whereas current market prices have already far exceeded that figure. With a fantastic projected net profit growth of 76% (CAGR) and plans for ore sales volume to surge to 42 million tons by 2027, INCO possesses a massive upside potential for upward revisions following the currently red-hot nickel prices.
Written by Boris, the Broker
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