Asia

After several months of discussions, Indonesia is considering an increase in its 2026 RKAB mining quota from the current 250-260 million tonnes to around 360 million tonnes. While the proposal has not been confirmed by the government, it would represent the first meaningful easing of supply restrictions this year.

Indonesia accounts for more than 60% of the world’s mined nickel supply, meaning changes to its mining policy can quickly reshape expectations for the global market. Until the end of May, the scenario was very different as quotas were expected to be cut and nickel prices moved slowly upwards on a monthly basis. Developments in more recent days have been game-changing.

An end to the Iran conflict and a retreat in fuel and energy prices to pre-war levels would enable the Indonesian economy to grow, as projects placed on the back burner are again expected to move at a faster pace. In the Middle East itself, significant volumes of stainless scrap have begun to be shipped out; most of these stocks were procured at reduced price points when the LME was lower and the Iran conflict had not broken out.

In the second quarter, Taiwanese mill demand for stainless steel scrap started strongly. However, the arrival of the summer months sees high electricity costs kick in, weakening demand for stainless scrap. Hot coils and nickel pig iron have remained competitive while traditional sectors continue to offer low demand. Imports of hot coil stabilised at an average of 90,000 tonnes per month between April and June.

South Korea’s stainless steel scrap demand was stable in the second quarter and production has returned to normal after scheduled furnace maintenance. Japan’s domestic consumption of stainless scrap was steady during the quarter and exports have dropped to low levels compared to previous years as domestic mills increasingly use local supplies. The Japanese government recently imposed stainless steel anti-dumping duties of up to 45% on Chinese products and up to 21% on Taiwanese products.

Latest figures indicate China’s real estate investment has fallen 13.7% year on year, and traditional demand sectors remain weak for stainless steel. Global exchange stocks of nickel reached 468,000 tonnes. LME nickel warehouse stocks have decreased slightly this year, while those in Shanghai have soared to over 96,000 tonnes.

Indian demand for stainless steel scrap was strong in March, April and May but slowed from mid-June. The Iran conflict fueled higher scrap prices as LME nickel surged month on month. Container freight rates also increased substantially but scrap continued to be shipped even as its prices went higher.

The overall outlook for India is very positive in the long term as plants have constantly increased their production tonnages year on year. In 2025, there was an increase of 7% in stainless scrap imports.

Heading into the new quarter, Indian mills have the feeling the market can soften further for several reasons. The traditional summer holiday period will begin in Europe in mid-July and, at the same time, there is an availability of large volumes of scrap from the Middle East which earlier could not be shipped because of the conflict but which are now being moved at competitive rates which are lower than for scrap from the Far East. Furthermore, the Indian monsoons begin in July and plants usually slow down owing to labour shortages and mill maintenance. Imports of ferro-nickel and nickel pig iron have also fallen substantially owing to poor market conditions and the sharp drop in nickel prices.