LME nickel inventories have fallen 17% since the March 2026 peak, declining to approximately 68,000 tonnes of registered stock. An additional 22% of warrants are currently cancelled or pending load-out, suggesting further physical withdrawals in the coming weeks.
The inventory drawdown is concentrated in LME warehouses in Rotterdam and Singapore, where high-grade nickel briquettes and cathodes are being withdrawn for delivery to stainless steel mills and battery precursor producers in Europe and Asia.
Global stainless steel production rose 3.5% year-on-year in Q2 2026, driven by strong demand from construction, kitchenware, and chemical processing sectors. The 300-series austenitic grades, which contain 8-10% nickel, account for the majority of the increase.
On the supply side, Class 1 nickel availability remains constrained. Russian nickel exports continue to flow to LME warehouses, but volumes are below pre-conflict levels. Australian nickel producers face cost pressures at current prices, with several high-cost operations operating near breakeven.
The inventory trajectory points to further tightening through H2 2026 unless new Class 1 supply sources emerge. HPAL ramp-ups in Indonesia are not expected to contribute meaningful LME-deliverable volumes before 2027.
Inventory declines support higher LME nickel prices. The low stock coverage ratio (weeks of consumption) is historically supportive of prices. Buyers should maintain strategic inventory positions and consider forward contracts for H2 requirements.