LME nickel remains rangebound, settling at $17,640/mt on June 22, with no clear direction emerging from either supply or demand signals. The metal has traded within a $550/t band for three weeks, the narrowest range since early 2025. Open interest is stable, suggesting participants are waiting for a catalyst rather than positioning directionally.
The Class 1 market (high-purity nickel deliverable against LME contracts) continues to show relative tightness. Physical premiums for LME-deliverable briquettes and cathodes are running at $500-800/t over the cash price, supported by aerospace superalloy demand and defense sector procurement. Defense-related nickel consumption is estimated to have grown 12% year-on-year in H1 2026.
The Class 2 market tells a different story. Indonesian nickel pig iron (NPI) production reached an annualized run rate of 1.8 million tonnes of contained nickel in May, up 15% year-on-year. The surplus of NPI and mixed hydroxide precipitate (MHP) is weighing on the broader nickel complex, preventing any sustained rally above $18,000.
The market is watching for Indonesian policy signals. The new government has discussed potential export levies on nickel intermediary products, which would raise costs for Chinese stainless steel and battery material producers. No policy changes have been announced, but the risk is keeping some shorts cautious.
The rangebound nickel market offers predictable pricing for buyers. Fix Q3 requirements at $17,400-17,600/mt while the range holds. There is no urgency to cover aggressively unless Indonesian export policy changes. If Indonesia announces export levies, expect an immediate $500-1,000/mt rally. Track the weekly LME stock report and Indonesian policy statements as the two key catalysts.