LME nickel prices edge up on trade optimism despite elevated inventories

• LME nickel inventories reach highest level since early-2025
• China, US reach preliminary trade consensus in Kuala Lumpur

Nickel prices on the London Metal Exchange (LME) continued to show volatility last week, with cash settlement tags fluctuating within approximately $14,925-15,110/t. The market saw a slight recovery towards the second half of the week, closing near $15,285/t on 24 October, the last trading day of the week. Prices were higher by 1% against $15,130/t on 17 October.

During the same period, nickel stocks on the LME remained elevated throughout the week, closing at around 250,854 t, near the highest levels since the start of 2025. This persistent inventory build-up continues to weigh on price momentum, signalling ongoing oversupply concerns. However, optimism prevailed, with China-US talks showing some progress.

Macro factors

China, US reach preliminary consensus in Kuala Lumpur talks

China and the United States recently held productive economic and trade consultations in Kuala Lumpur, Malaysia, addressing key concerns such as export controls, reciprocal tariff suspension extensions, fentanyl tariffs, and vessel charges. Both sides reached a preliminary consensus and agreed to finalise details through domestic approval processes, marking positive progress in stabilising bilateral trade relations.

Environmental concerns rise over nickel mining in the Philippines

Nickel mining in the Philippines, a vital supplier for clean energy technologies, faces scrutiny due to severe environmental damage. Extensive deforestation, soil and water contamination, and biodiversity loss near protected areas have sparked outrage. Despite government requirements for rehabilitation, restoration efforts lag, raising concerns about irreversible harm to ecosystems and local communities reliant on these natural resources.

Latest US macroeconomic data signal further Fed rate cuts

Softer-than-expected US September CPI data increased market bets that the US Federal Reserve will implement two more rate cuts this year. This potential monetary easing, alongside positive China-US trade talks, has bolstered nickel market sentiment, although supply-demand uncertainties likely keep prices consolidating sideways.

Outlook

Nickel prices on futures are expected to remain on the positive side in the near term. China-US trade talks and lower-than-expected US inflation data have improved market sentiment, but ongoing supply and demand uncertainties are likely to keep prices consolidating sideways.