LME nickel eases 2% w-o-w amid profit-taking despite supply concerns

• Nickel retreats after testing one-month high above $19,200/t
  
  
• Stronger US dollar halts gains despite supportive demand outlook
  
  

London Metal Exchange (LME) nickel futures declined 2% w-o-w to $18,750/t on 5 June 2026 from $19,125/t a week earlier, reversing gains after briefly touching a one-month high above $19,200/t during the week. The correction came as market participants booked profits following the recent rally, while broader macroeconomic pressures weighed on sentiment.

Supply-side concerns remain supportive

Nickel prices initially strengthened on tightening supply fundamentals. LME nickel inventories continued to trend lower, reinforcing concerns over near-term availability. Stocks declined by 1% w-o-w to 274,236 t on 5 June from 276,864 t on 29 May, extending the recent drawdown trend.

Additional support came from Zimbabwe's restrictions on nickel exports, constrained availability of Indonesian mixed hydroxide precipitate (MHP), and ongoing limitations on Indonesian ore quotas. Market participants also highlighted persistent cost pressures and tighter ore availability across Indonesia's nickel industry. Producers such as PT Vale Indonesia, Harita Nickel, and Merdeka Battery Materials have continued to navigate challenges related to ore supply, permitting processes, and rising operating costs, supporting expectations of tighter nickel unit availability in the market.

Demand outlook stays constructive

On the demand side, resilient manufacturing activity in China and stable stainless steel production provided support to the market. Expectations of continued growth in the electric vehicle (EV) sector also contributed to positive sentiment, helping nickel maintain a relatively firm footing despite broader market volatility.

However, gains proved short-lived as a stronger US dollar and persistent geopolitical uncertainties reduced risk appetite across the base metals complex. Profit-taking accelerated after prices approached recent highs, pushing nickel futures back below the $19,000/t threshold by the end of the assessment period.

Outlook

LME nickel prices are expected to remain range-bound with a mildly firm bias in the near term. Declining inventories, Indonesian raw material constraints, and Zimbabwe's export restrictions are likely to provide underlying support. Demand from China's stainless steel and EV sectors also remains constructive. However, macroeconomic challenges, including US dollar strength, interest rate uncertainty, and geopolitical developments, may continue to cap upside momentum.