LME three-month nickel traded in a narrow range around $17,770/mt, settling unchanged on the session. The metal has been stuck in a $17,500-18,500 range for the past three weeks, unable to break higher or lower as conflicting supply-demand signals keep the market directionless.
The Indonesia overhang remains the dominant bearish factor. Indonesian nickel pig iron (NPI) output reached 1.05 million tonnes in Q2 2026, up 6.2% year-on-year. A growing share of this output is being converted into high-grade nickel matte, directly competing with LME-deliverable Class I material.
LME nickel inventories stood at 84,000 tonnes, down 0.3% on the week. The slow drawdown suggests that physical demand is absorbing some of the surplus, but not enough to trigger a significant price recovery. The contango structure persists, with the cash-three month spread at -$42/mt.
Demand from the stainless steel sector, which accounts for 65% of nickel consumption, has been steady but unexciting. Global stainless output grew 2.4% year-on-year in Q1, according to ISSDA, driven by Chinese production gains that were partially offset by European weakness.
Nickel is range-bound with no clear catalyst. Buyers should use rallies above $18,000 to layer forward coverage, and set limit orders at $17,200 for opportunistic spot purchases. Avoid building large unhedged positions in a directionless market.