Nickel prices jumped more than 10% on Tuesday, marking the metal’s sharpest single-day gain in over three years, as a wave of Chinese buying accelerated a powerful rally across global metals markets.
On the London Metal Exchange (LME), nickel climbed to an intraday high of $18,785 per tonne, extending a blistering advance that has lifted prices nearly 30% since mid-December. The move comes despite the market remaining structurally oversupplied, underscoring the strength of recent speculative and investment-driven demand.
Market sentiment has been bolstered by growing concerns over potential production risks in Indonesia, the world’s largest nickel supplier. While Indonesia’s rapid capacity expansion has weighed on prices in recent years, rising regulatory uncertainty and operational risks are now helping to stabilize expectations and fuel renewed bullishness.
Sharp Reversal for a Beaten-Down Market
The surge represents a dramatic turnaround for nickel, which has struggled under the weight of excessive supply growth and weaker-than-anticipated demand from electric-vehicle battery manufacturers. The latest rally also signals a revival in trading activity on the LME, where nickel volumes collapsed following the market’s historic short squeeze in 2022.
Analysts say renewed investor participation — particularly from China — has played a key role in reigniting momentum across the complex.
China Drives the Momentum
Trading patterns point to strong Chinese influence, with prices for nickel, copper, and tin surging during Asian trading hours. LME contracts saw heavy volumes early in the session, followed by renewed gains once night trading opened on the Shanghai Futures Exchange, reinforcing the impression of coordinated investment flows.
This wave of buying has contributed to a strong start for base metals in 2026. The LMEX Index, which tracks the six major LME-traded metals, climbed to its highest level since March 2022, when the sector last peaked.
Copper has led the charge, gaining more than 20% since late November, while aluminum rallied to its highest level since April 2022. Copper extended its advance this week after breaking above $13,000 per tonne for the first time, as investors bet on tightening supply conditions and embraced a broader risk-on mood across financial markets.
Three-month LME copper futures surged as much as 3.1% on Tuesday to a fresh record of $13,387.50 per tonne, surpassing the previous all-time high set just one day earlier.
Momentum Meets Fundamentals
While questions remain about the sustainability of the rally — particularly given lingering oversupply in some metals — the strength and breadth of recent gains highlight how rapidly sentiment can shift when investment flows, supply risks, and macro optimism align.
For now, nickel’s breakout has become the latest symbol of a resurgent metals market, with traders closely watching whether fundamentals can ultimately justify the pace of the advance.
