Nickel prices surged over 10% in London, marking the largest increase in over three years. This spike was largely driven by increased investor interest in China, igniting a wider rally in the metals market.
The price of nickel, essential for batteries and stainless steel, reached $18,785 per tonne on the London Metal Exchange. This surge extends a nearly 30% increase since mid-December. While the nickel market is facing significant oversupply, renewed investment in China’s domestic metals market and rising production risks in Indonesia, the top supplier, are enhancing market sentiment.
This shift in nickel’s fortunes is quite staggering, considering the challenges posed by Indonesia’s excessive production and the lower-than-anticipated consumption in electric vehicle batteries. Additionally, this marks a notable comeback for the LME nickel contract, which saw trading volumes decline drastically following the historic short squeeze in 2022.
Recent trading trends indicate that Chinese investors have enough pull to significantly elevate the prices of metals like nickel, copper, and tin. LME prices rose sharply during Asian trading hours and continued to climb during overnight sessions on the Shanghai Futures Exchange.
Base metals have made a robust start in 2026; the LMEX index—tracking six major metals—has reached its highest level since the sector peaked in March 2022. Copper has appreciated over 20% since late November, and aluminum prices have also risen to their highest point since April 2022.
Copper prices soared past $13,000 a tonne for the first time this week, buoyed by an expectation of tight supplies and a risk-on sentiment throughout financial markets. Three-month LME futures jumped as much as 3.1% on Tuesday, surpassing Monday’s all-time high to set a new record of $13,387.50 per tonne.
While copper demand has slowed somewhat in recent months, especially in China, it seems to be increasingly directed towards the United States. American buyers are engaged in competitive bidding to secure supplies. This has been influenced by expectations that tariffs on refined metals could be reintroduced, leading to a significant influx of inventories into the U.S., which may result in shortages elsewhere as mining operations struggle to increase production.
Last year, President Donald Trump initially prompted a rush of copper exports to the U.S. but later exempted refined metal from tariffs, causing a temporary halt in price movements. However, revisiting the tariff issue has spurred local prices higher, and trading activity has picked up in recent months, with U.S. copper imports in December hitting their highest level since July.
Currently, there are 44 consecutive days of net inflows, and more than 500,000 short tons of copper are now held in Comex-tracked warehouses. Although the LME’s inventory has almost halved over the past year, it remains above the recent low recorded in June.
By the end of trading in London, LME copper settled 1.9% higher at $13,238 per tonne. Nickel closed up by 9% at $18,524 per tonne, while tin rose by 4.9%.
