LME nickel has established one of the cleanest trading ranges in base metals: a $16,500-$18,500/mt band that has contained price action for three consecutive months. The $17,000/mt level has been tested four times as support, each test followed by a bounce.
The persistence of the range reflects the fundamental standoff between Indonesian supply expansion and low-exchange-inventory support. Neither force has been strong enough to break the range, but the duration suggests a breakout is approaching.
Volume has contracted during the range trade, a pattern that typically precedes an expansion move. Bollinger Bands are narrowing, and the weekly ATR (average true range) has fallen to $480/mt, the lowest since January 2026.
A breakout above $18,500/mt would target the January 2026 high of $20,000/mt. Such a move would likely be triggered by supply disruption (e.g., Indonesian policy change) or a sharp draw in LME inventories below 250,000 tonnes.
Conversely, a break below $16,500/mt would suggest a structural breakdown, opening the path to $15,000/mt. This would require a catalyst such as new Indonesian capacity coming online faster than expected or a slowdown in stainless steel demand.
The range trade persists, making range-bound hedging strategies appropriate. Buyers should sell LME $18,500 calls against physical positions to generate premium income, while using the $16,500-17,000/mt support zone to add selective long positions for Q4 2026 delivery.