Nickel prices came under renewed pressure on Tuesday, December 16, 2025, hovering near multi-month lows as markets absorbed fresh signs of weakness from the Chinese economy, thinner liquidity toward year-end, and a new wave of warnings about supply surpluses alongside updated bank forecasts.
In London, benchmark nickel struggled to regain momentum after testing an eight-month low earlier in the week, while nickel contracts in China slid to fresh multi-year lows, reinforcing the view that the market remains dominated by ample supply and cautious demand.
Where is nickel trading?
“Nickel prices today” vary depending on the benchmark used (LME three-month contracts, cash prices, exchange-traded futures, or regional spot markets). The main reference points are as follows:
LME nickel (three-month contracts): Prices were reported down 0.2% to $14,310 per metric ton during London trading, after touching an eight-month low of $14,235 on Monday.
LME official closing price (one-day deferred): The exchange showed a three-month nickel closing price of $14,346, down 1.65%.
Intraday trading range (three-month contracts – via SMM): Widely followed market data showed an opening price of $14,280, a session high of $14,350, a low of $14,250, with prices later trading near $14,310.
Nickel futures (Investing.com): Futures were trading near $14,281, within a daily range of $14,218 to $14,320.
Shanghai Futures Exchange (SHFE): Reuters reported that nickel prices in Shanghai fell to a 40-month low of 111,770 yuan per ton, highlighting the pronounced weakness in the Chinese market.
Bottom line: Across the main global benchmarks, nickel is effectively trading in the mid-$14,000 per ton range, while China’s domestic market is showing the clearest negative momentum.
What is driving nickel prices?
Today’s nickel moves are not driven by a single headline, but by a combination of macroeconomic pressures, demand concerns, and supply-surplus dynamics.
1. China demand concerns resurface
One of the main drags on industrial metals today is renewed evidence of slowing Chinese industrial activity. Reuters reported that factory output growth in China slowed to a 15-month low in November, while new home prices continued to decline — a combination that typically weighs on demand expectations for base metals.
As stainless steel remains the largest day-to-day demand driver for nickel, any signs of weakness in China’s construction and manufacturing sectors tend to feed quickly into nickel pricing.
2. Supply surplus dominates — and forecasts reinforce it
The supply surplus remains the central theme in the nickel market and has been reinforced again this week.
Reuters noted that Russia’s Nornickel raised its estimates for the nickel surplus and pointed to a much larger oversupply in 2025 and 2026 compared with earlier projections. This is particularly significant given Nornickel’s position as one of the world’s largest refined nickel producers, making its market balance outlook closely watched.
At the same time, weakness is evident across the broader nickel value chain.
Reuters highlighted that nickel pig iron (NPI) and nickel sulphate have been under pressure since mid-October, reflecting stress in stainless steel inputs and battery materials.
3. Year-end liquidity amplifies price swings
As many market participants scale back risk exposure toward year-end, price moves can become more exaggerated than fundamentals alone would suggest.
In a market update published by Reuters, analysts at Sucden Financial noted that thinner liquidity could amplify volatility in base metals, leaving markets vulnerable to sharper moves.
In practical terms, even relatively modest selling can push nickel prices lower when order books are thin.
China signals within the physical nickel market: spot prices, premiums, and real-economy demand
One of the most useful ways to read the nickel market is to look beyond LME prices and examine developments in China’s physical market.
Refined nickel spot market: lower prices, mixed premiums
Shanghai Metals Market (SMM) reported that prices for Class 1 refined nickel in China on December 16 ranged between 111,700 and 117,800 yuan per ton, with an average of 114,750 yuan, down 2,650 yuan on the day.
At the same time, SMM noted that premiums for Jinchuan refined nickel remained elevated, priced around 5,500–5,700 yuan per ton (average 5,600 yuan), despite the decline in the base price.
This combination — falling outright prices but resilient premiums — typically points to a market where demand is cautious, but preferred deliverable material still commands a premium.
Battery-grade nickel sulphate: easing amid weak buying appetite
In the battery segment, SMM reported that its battery-grade nickel sulphate index stood at 27,181 yuan per ton, with quoted prices ranging from 27,430 to 27,530 yuan per ton, slightly lower on the day.
SMM attributed the softer tone to a combination of:
A decline in LME nickel prices, reducing near-term cost support,
Weak demand from downstream processors,
And generally subdued restocking appetite.
Core nickel assessment today: “searching for a bottom” amid inventory pressure
A detailed SMM report dated December 16 described nickel as being in a “searching for a bottom” phase after breaking key technical support levels, with upside capped by high inventories and weak demand.
SMM also outlined the tension between cost support and inventory pressure:
Price action (SMM): LME nickel hovered near $14,295 per ton, down 2.22%, while the most-traded SHFE nickel contract fell 2.36% on the day.
Inventory levels: SMM reported refined nickel social inventories around 59,000 tons in December, with LME stocks near 253,000 tons, underscoring weak demand.
Cost floor discussion: SMM highlighted production cost benchmarks for refined nickel from various intermediate routes, noting that hydrometallurgical processing costs are becoming a key level traders are watching for potential price support.
Near-term price range (China): SMM expects the most active SHFE nickel contract to trade between 112,000 and 116,000 yuan per ton in the short term.
This framework captures current market psychology: prices may drift toward cost levels, but abundant inventories continue to cap any recovery attempts.
Nickel price outlook: what analysts updated today (December 16, 2025)
Forecasts moved back into focus today following a notable update from a major investment bank.
Morgan Stanley: nickel seen “drifting” toward $15,500 per ton in 2026
In a note cited by Reuters on December 16, Morgan Stanley revised its 2026 outlook for base metals, stating it expects nickel prices to ease toward $15,500 per ton as demand growth broadly matches supply growth.
At the same time, the bank highlighted several cross-currents complicating the outlook:
Potential supply-side risks from policy changes in Indonesia,
Loss of market share in electric-vehicle batteries weighing on demand,
Keeping the nickel market in surplus through 2026 in its base case.
This projection represents a middle-ground scenario: it does not foresee a sharp rebound, but also suggests that nickel may not remain stuck at today’s depressed levels indefinitely.
What to watch next for nickel prices
With nickel consolidating near the lower end of its recent range, traders and industrial buyers are focusing on several near-term catalysts:
China demand signals
Upcoming data on industrial activity, property, and stainless steel will be closely watched, as the latest selloff was tightly linked to growth concerns in China.
Supply surplus narrative versus policy risks
The market is weighing surplus expectations against the possibility that regulations, quotas, or disruptions — particularly related to Indonesia — could tighten balances faster than expected.
Battery materials pricing and buying behavior
Nickel sulphate prices and downstream purchasing patterns may offer early clues on demand, and for now SMM describes buying as cautious and deal flow as sporadic.
Inventory trends (LME and China)
Inventories and deliverable supply remain central to sentiment, with current analysis continuing to highlight stock overhangs as a key constraint on any sustained upside.
