LME nickel prices are showing resilience despite structural challenges, with prices remaining firm above $18,900 per tonne through late May. The market is supported by steady demand from stainless steel producers and battery manufacturers, who continue to absorb available supply amid ongoing supply-demand uncertainties.
The demand picture is bifurcated. Class 1 nickel (higher purity, LME-deliverable) is benefiting from battery sector demand, particularly for nickel sulfate used in lithium-ion batteries. Meanwhile, the broader nickel market is grappling with structural oversupply from Indonesia, where NPI and MHP production capacity has expanded rapidly.
Short-term price action has been volatile, with intraday pullbacks driven by profit-taking after rallies. On May 28, nickel rose 0.83 percent on the LME, contributing to a broader base metals rally. The backwardation structure in the nickel futures curve suggests near-term physical tightness despite the medium-term surplus narrative.
Fastmarkets describes nickel as having traded more sideways compared to other base metals, reflecting structural headwinds even as near-term supply-side risks remain. The divergence between LME-deliverable material and broader nickel supply continues to create price dislocations and arbitrage opportunities.