(March 31, 2026, Comprehensive News)Indonesia's Minister of Finance Purbaya Yudhi Sadewa officially announced on March 26 that President Prabowo has approved the imposition of a windfall profit tax on coal and nickel products starting April 1, 2026. Coupled with higher export tariffs on nickel and tighter mining quotas, this package of policies has directly driven up global nickel prices and strengthened domestic stainless steel futures.
I. Core Policy Content
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Windfall Profit Tax
Levied on nickel and coal products, triggered by sustained price increases, taxing excess profits of enterprises. It will be superimposed on the existing floating resource tax on nickel ore (14%–19%).
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Export Tariffs
Export tariffs on nickel will be raised simultaneously, with an expected tariff range of
5%–15%, and the market generally forecasts a final rate of around 8%, to be formally implemented on April 1.
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Tighter Mining Quotas
Indonesia's nickel ore mining quota for 2026 has been set at
260–270 million metric tons, a reduction of more than 100 million tons from 379 million tons in 2025, representing a decline of
29%–34%, the largest drop in nearly a decade. The quota of PT Weda Bay Nickel, the world's largest single nickel mine, plummeted from 42 million tons to 12 million tons, a decrease of over 70%. In addition, the quota approval cycle has been changed from three-year reviews to
annual assessments, with priority given to supporting domestic integrated mining-smelting and high value-added projects.
II. Background and Objectives of the Policies
As the world's largest nickel producer, Indonesia controls 65%–70% of global nickel ore supply. The core objectives of this policy package are clear:
- To increase fiscal revenue, addressing fiscal pressure amid rising energy prices driven by geopolitical conflicts, and retaining more dividends from nickel resource value domestically through tax leverage.
- To promote industrial upgrading by raising export costs of primary nickel products, forcing global capital to deploy high value-added smelting capacities such as stainless steel and new energy battery materials in Indonesia, reversing the pattern of exporting low-priced primary ore for meager profits.
- To control volume and stabilize prices by proactively tightening supply to lock in global nickel prices, with an official target range of 19,000–20,000 US dollars per ton, in a bid to gain pricing power over nickel.
- To protect resources by cracking down on illegal mining, extending the mining cycle of high-grade nickel ore and alleviating excessive resource consumption.
III. Immediate Market Reactions
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Sharp Rise in Nickel Prices
Following the policy announcement, London Metal Exchange (LME) nickel futures once surged by
2.7%, while the most-active SHFE nickel contract rose by
1.5% week-on-week, fueled by strong expectations of tightening supply.
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Stronger Stainless Steel Futures
As a core raw material for stainless steel, rising nickel costs have directly lifted stainless steel futures prices, with the main contract firmly breaking above the
14,000 yuan per ton mark.
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Pressure on Downstream Costs
For 304 stainless steel pipes, if the nickel export tariff is implemented at 8%, nickel prices are expected to rise by 4%, increasing the cost of 304 stainless steel pipes by
230 yuan per ton. At a 10% tariff rate, the cost increase will reach
300 yuan per ton, squeezing profit margins for downstream stainless steel enterprises.
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Price Adjustments by Industry Leaders
As an industry bellwether, Indonesia's Tsingshan Group has signaled price increases to customers, adjusting raw material export quotations in line with the policies, gradually transmitting cost pressures.
