Nickel futures show signs of stabilization after a sharp decline, as traders await clearer signals on global supply dynamics. Market participants are closely monitoring production updates from key mining regions.
- LME nickel futures stabilized near $20,500 per metric ton after falling below $19,800
- China’s nickel imports declined 3% in December compared to previous month
- LME warehouse inventories rose 7% month-over-month, indicating potential oversupply pressure
- Projected 2026 supply deficit estimated at up to 150,000 tons if current outages continue
- Major producers including Norilsk Nickel, Vale, and BHP expected to release production data in mid-January
- Regulatory scrutiny in EU may influence future sourcing and trade flows
Nickel prices have steadied in early trading following a steep drop earlier in the week, with benchmark LME nickel futures holding near $20,500 per metric ton. The rebound comes amid growing investor caution over supply disruptions linked to recent operational delays in Indonesia and Russia’s Norilsk Nickel output. Analysts note that the metal’s volatility reflects uncertainty around new smelter capacity expansions and regulatory changes affecting processing activities. The recent downturn had pushed prices below $19,800, triggering margin calls and forcing some hedge funds to reduce exposure. However, volumes traded in the past 48 hours indicate a shift toward risk management rather than panic selling. Spot demand remains firm in China, where battery manufacturers continue to place orders for high-grade nickel cathodes used in EV batteries, supporting underlying fundamentals despite the price swings. Key data points include a 7% month-over-month increase in inventory at LME-approved warehouses and a 3% contraction in Chinese nickel imports during December. These figures suggest a tightening physical market despite elevated futures volatility. Meanwhile, analysts project that refined nickel supply could fall short by up to 150,000 tons in 2026 if current outages persist, driven by maintenance shutdowns and logistical bottlenecks in Southeast Asia. Market participants now await official production reports from major producers like Vale and BHP, scheduled for release in mid-January. Price stability will likely depend on whether these reports confirm or alleviate concerns about long-term supply constraints. Investors are also watching for policy developments in the EU's critical raw materials regulation, which may impact import tariffs and sourcing mandates.