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.

Bitcoin fell on Tuesday, extending its recent selloff as risk appetite — particularly toward highly speculative crypto assets — remained weak.

Cryptocurrency prices largely tracked the prolonged downturn in global technology stocks, as growing questions around artificial intelligence pushed investors to lock in recent gains across the sector. Losses in tech shares weighed on demand for cryptocurrencies and other high-risk assets.

Bitcoin dropped 4% to $85,987.9 by 00:35 ET (05:35 GMT), nearing its weakest levels in about two weeks. The cryptocurrency also remained close to its seven-month low recorded in late November.

Bitcoin under pressure as sentiment deteriorates ahead of jobs data

Bitcoin has steadily lost momentum over the past week, failing to draw meaningful support from the Federal Reserve’s recent interest rate cut and its more accommodative policy tone.

Risk appetite remained fragile as traders awaited data likely to influence the Fed’s future policy direction. The US non-farm payrolls report for November is due later on Tuesday, followed by consumer inflation data on Thursday.

The labor market and inflation remain the key inputs guiding the Federal Reserve’s policy decisions. Any signs of weaker job growth or easing inflation pressures could reinforce expectations for further rate cuts.

Such a scenario could help Bitcoin recover some of its losses, as lower interest rates tend to boost the appeal of speculative assets such as cryptocurrencies.

The Federal Reserve also began repurchasing short-term Treasury securities last week, increasing market liquidity and potentially opening the door for additional flows into risk assets, including cryptocurrencies. Ultra-low interest rates and liquidity injections — often referred to as quantitative easing — were among the main drivers behind the cryptocurrency rally in 2021.

Cryptocurrency prices today: altcoins follow Bitcoin lower

Other cryptocurrencies declined broadly, with major altcoins following Bitcoin’s losses.

Ether, the world’s second-largest cryptocurrency, fell 6.33% to $2,922.06, while XRP dropped nearly 6% to $1.8817.

Oil prices fell on Tuesday below $60 a barrel — their lowest level since May this year — as signs of progress in peace talks between Russia and Ukraine strengthened expectations that sanctions on Moscow could eventually be eased.

Brent crude futures dropped by 81 cents, or about 1.3%, to $59.75 a barrel by 12:14 GMT, while US West Texas Intermediate crude fell 84 cents, or nearly 1.5%, to $55.98 a barrel.

Janiv Shah, an analyst at Rystad Energy, said: “Brent slipped below $60 a barrel this morning for the first time in months, as the market assesses the possibility of a peace deal that could bring additional Russian oil supplies back to the market, further increasing the supply glut.”

The United States has offered NATO-style security guarantees to Kyiv, while European negotiators reported progress in talks on Monday aimed at ending Russia’s war on Ukraine, raising optimism that a settlement to the conflict may be approaching.

Russia, however, said it is not prepared to make any territorial concessions in talks aimed at ending the war in Ukraine, according to comments by Deputy Foreign Minister Sergei Ryabkov cited by Russia’s TASS news agency.

John Evans, an analyst at PVM Oil Associates, said: “The slow pace of negotiations will likely be accompanied by a continued gradual decline in prices as we move into 2026, with all the expectations of a supply surplus that year. Brent is likely to record a new year-to-date low, but it is unlikely to fall below $55 a barrel before the end of the year.”

Meanwhile, Barclays analysts expect Brent crude to average $65 a barrel in 2026, slightly above current futures prices, against the backdrop of an expected surplus of 1.9 million barrels per day, which they believe is already priced into the market.

Weak China data add further pressure

Pressure on oil prices intensified following the release of weak Chinese economic data on Monday, reinforcing concerns that global demand may not be strong enough to absorb recent supply growth, according to Tony Sycamore, market analyst at IG, in a research note.

Official data showed that China’s industrial output growth slowed to a 15-month low, while retail sales recorded their slowest growth since December 2022, during the COVID-19 pandemic period.

Supply glut concerns were only partially offset after the United States seized an oil tanker off Venezuela’s coast last week, but traders and analysts said rising floating storage and increased Chinese purchases of Venezuelan oil ahead of sanctions have limited the impact of that development on the market.

The dollar hovered near multi-week lows against both the euro and the Japanese yen on Tuesday, as investors awaited the release of US economic data later in the session that could influence expectations for the Federal Reserve’s monetary policy path.

Attention this week is focused on central bank decisions, with the European Central Bank and the Bank of England holding policy meetings on Thursday, while the Bank of Japan is set to announce its monetary policy decision on Friday.

Euro supported by mixed data and a longer tightening bias

Economic data from the euro area were mixed but supported the European Central Bank’s stance of keeping interest rates higher for longer, lending support to the euro. German investor sentiment rose more than expected in December, while euro zone business activity growth slowed toward the end of 2025.

However, the ECB’s lack of any explicit pushback against market bets on interest rate hikes in late 2026 or early 2027 may be interpreted as tacit approval, leaving room for a hawkish surprise at this week’s policy meeting.

The euro rose by 0.05% to $1.1758, after touching $1.1769 on Monday, its highest level since September 24.

Ukraine peace talks under scrutiny

Ukraine peace talks remain in focus after Swedish Prime Minister Ulf Kristersson said tangible progress had been made on security guarantees during talks in Berlin on Monday, although investors remain cautious about the prospects of a lasting agreement.

Bank of Japan decision awaited as rate hike is priced in

A rate hike by the Bank of Japan is largely priced in by markets, but any signal pointing to further tightening ahead of spring wage negotiations would mark a shift toward a more hawkish stance.

Confidence among large Japanese manufacturers reached its highest level in four years in the three months through December, supporting expectations of additional monetary tightening. Still, analysts said the policy update may not be sufficient to support the yen amid concerns linked to fiscal pressures.

The Japanese government is planning additional tax breaks to stimulate investment, despite market concerns over rising public debt levels.

The dollar fell by 0.25% to ¥154.85 ahead of the Bank of Japan decision, while renewed volatility prompted investors to seek safe havens. The dollar had touched ¥154.34 in early December, its lowest level since November 14.

Morgan Stanley said it maintains a neutral stance on the dollar/yen pair but sees downside risks if US labor market data continue to deteriorate.

US data fog begins to lift

Interest rate futures show markets pricing a 75.6% probability that the Federal Reserve will keep interest rates unchanged at its next meeting on January 28, unchanged from the previous day, according to the CME FedWatch tool.

Stefan Koopman, senior macro strategist at Rabobank, said: “Market consensus expects November job growth to come in slightly below trend by around 50,000 jobs, with the unemployment rate between 4.4% and 4.5%, a reading that would ease concerns about the labor market while keeping the option of rate cuts alive.”

He added: “A weaker reading could trigger risk-off moves, with equities falling, the dollar weakening, and flows moving toward cash and US Treasuries.”

The dollar index, which measures the US currency against a basket of six major currencies, traded at 98.20 points, slightly lower after earlier nearing its weakest level since October 17.

Analysts were divided, with some arguing that the data would help clarify employment trends during the US government shutdown period, while others doubted they would fully remove uncertainty.

Chinese yuan hits a 14-month high

The offshore Chinese yuan rose by 0.1% to 7.0371 per dollar, its strongest level since October 3, 2024.

Chris Turner, head of global markets at ING, said: “The People’s Bank of China will not rush to accept a sharp appreciation of the renminbi, but pressures could build in 2026, especially if our expectations for two additional Federal Reserve rate cuts prove correct and the dollar weakens modestly.”

The Australian dollar was little changed at $0.6638, after a private survey showed consumer confidence slipping in December.