LME nickel hits near two-month high on supply Curbs, fed rate-cut hopes

Nickel prices on the London Metal Exchange (LME) jumped sharply on December 22, climbing to their highest level in nearly two months, supported by expectations of tighter supply from Indonesia and a weaker U.S. dollar amid growing bets on interest rate cuts by the Federal Reserve, yieh.com reported.

LME nickel futures rose by US$473 per tonne to US$15,276 per tonne, while the spot price gained US$472 to US$15,087 per tonne. The rally marked the fourth consecutive session of gains, with futures prices up a cumulative US$1,013 per tonne, or 7.1%, since mid-December, reaching levels last seen on October 30.

Since the beginning of December, nickel prices have increased by about US$447 per tonne, or roughly 3%, as the market began to factor in Indonesia’s plan to curb nickel ore production next year. Indonesia is the world’s largest nickel producer, and any tightening of output is closely watched by global markets.

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Sentiment was further lifted by expectations that the U.S. Federal Reserve could cut interest rates twice in 2026, pressuring the U.S. dollar and boosting dollar-denominated commodities such as nickel.

Despite the recent rally, analysts caution that the nickel market remains structurally oversupplied. While supply growth is expected to slow due to policy measures in Indonesia, actual demand has yet to show a strong recovery. As a result, prices are likely to remain volatile, with a near-term bias toward slightly higher levels rather than a sustained uptrend.

Editing by Alexander Ginting