Indonesia’s RKAB approvals, mills’ production cuts emerge as key drivers for China’s stainless steel market in Jul’26

• • Nickel falls 10% in Jun’26 amid reports of hike in Indonesia production quotas

• • Stainless steel mills’ production cuts may offset weak demand, rising inventories

SteelDaily: China’s stainless steel market is expected to remain volatile in July as uncertainty surrounding Indonesia’s nickel ore mining quotas (RKAB) and planned production cuts by major steelmakers continue to influence market sentiment.

Nickel prices declined by more than 10% during June amid speculation over a possible increase in Indonesia’s 2026 RKAB approvals. However, Indonesia’s Ministry of Energy and Mineral Resources (ESDM) clarified that the country’s 2026 nickel mining quota has not yet been finalised, while reports suggesting an increase to 360 million tonnes (mnt) remain under review. Market participants are closely monitoring additional RKAB approvals, as any increase could ease nickel ore supply, whereas delays may tighten raw material availability.

On the supply side, major Chinese stainless steel producers are expected to undertake scheduled maintenance and production cuts during July. Mills, including Xiangshui Derong, plan to reduce output, while supply in the Wuxi region is expected to operate at around 60% of normal capacity. Several producers in East China and Guangxi are also expected to trim production, potentially limiting downside pressure on stainless steel prices.

However, weak seasonal demand continues to weigh on the market. Stainless steel inventories in Wuxi increased 1.45% w-o-w to 603,351 t as of 25 June, while stocks at the Shanghai Futures Exchange (SHFE) rose by 1,121 t to 94,281 t. Slower downstream activity during the summer season and subdued demand from the real estate and manufacturing sectors have further dampened purchasing activity.

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