Nickel Contracts Retreat from Recent Highs as Profit-Taking and Weak Chinese Demand Offset Supply Constraints

London | EcoPulse24

Nickel contracts have retreated after reaching recent highs, as profit-taking and indications of slowing demand in China pressured prices. Nickel slipped toward $18,000 per tonne after surpassing $18,700 last week, impacted by falling spot prices and weak buying appetite in the Chinese market.

In China, the market tone turned cautious, with spot nickel prices dropping by about 3,450 yuan per metric tonne and Shanghai nickel futures falling by 1.6%, signaling profit-taking and short-term demand weakness. These factors weighed on prices, even as supply-side constraints remained supportive.

On the supply front, developments in Indonesia continued to underpin prices. Authorities reduced the 2026 nickel ore production quota by approximately 34% from last year to better match processing capacity and maintain high ore quality. Nickel Industries reported a revenue decline for the quarter ending December, due to delayed sales permits, with nickel ore sales falling from 3.09 million wet metric tonnes to 945,000 tonnes. Shipments resumed in January, with 735,000 wet metric tonnes sold by January 17, reinforcing expectations of disciplined Indonesian supply.

Analysis
The overall trend reflects a technical correction following a strong rally, led by profit-taking and weak Chinese demand, counterbalanced by robust supply constraints, particularly from Indonesia. The stability of nickel prices will depend on the pace of industrial demand recovery in China and the continued commitment of major producers to production controls.