LME nickel softens w-o-w as buyers remain cautious; inventories stable

• Geopolitical risks continue to shape market direction
• Nickel prices decline on weak sentiment and macro pressure

Nickel prices on the London Metal Exchange (LME) declined in the week ended 20 March, reflecting cautious market sentiment and weaker demand signals. The three-month nickel contract closed at $16,975/t, down 3% from $17,530/t in the previous week.

Meanwhile, LME warehouse inventories remained relatively stable, standing at 283,512 t compared with 284,658 t in the prior week. The marginal decline indicates balanced physical market conditions, with no significant supply disruptions reflected in exchange stocks.

Macro pressures weigh on sentiment

The decline in nickel prices was primarily driven by softer macroeconomic sentiment and a stronger US dollar, which continued to exert pressure on base metals. Market participants remained cautious amid mixed global demand indicators, particularly from the stainless steel sector.

At the same time, easing concerns over immediate supply tightness, especially from Indonesia, contributed to the downward price movement, even as longer-term policy risks persist.

Geopolitical tensions remain key risk

Ongoing tensions in the Middle East continue to influence market sentiment, particularly through potential disruptions to energy supplies and shipping routes. These risks have added volatility across commodity markets, including nickel, although their direct impact on supply chains remains limited so far.

Outlook

Nickel prices are expected to remain range-bound in the near term, with downside pressure from macroeconomic factors balanced by underlying supply-side risks. Developments in Indonesia’s mining approvals and geopolitical trends will remain key in determining price direction.