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• LME three month nickel gained about 1.6 percent through the week ending September 24
• Shanghai number one refined nickel averaged 126,725 yuan per tonne, up 1,625 yuan on the week
• Indonesian nickel ore 1.4 percent grade held at 51.8 dollars per wet metric tonne on September 22
• El Nino drought risk at Indonesia Morowali kept a firm supply bid under the market
• China US trade talks in New York on September 19 to 23 improved base metals risk appetite

Global nickel markets pulled higher through the trading week ending September 24, 2026, with the London Metal Exchange three month contract gaining about 1.6 percent and Chinese domestic prices lifting on the back of supply worries from Indonesia and a fresh round of trade talks between Beijing and Washington. On the Shanghai Futures Exchange, the 2610 contract added about 1.0 percent for the week while number one refined nickel averaged 126,725 yuan per tonne, an increase of 1,625 yuan on the previous week.

The main supply driver came from Indonesia. An El Nino driven drought at the Indonesia Morowali Industrial Park continued to threaten water availability at the country's largest integrated nickel processing hub, raising the prospect of forced production cuts at nickel pig iron lines that feed both stainless steel makers and battery precursor plants. Indonesian nickel ore prices for material delivered to the main domestic ports held mostly steady on September 22, with the 1.4 percent grade unchanged at 51.8 dollars per wet metric tonne, the 1.5 percent grade at 58.5 dollars, and the 1.6 percent grade at 63.4 dollars. The 1.2 percent limonite grade eased slightly to 26.5 dollars after a revised HPM benchmark formula lowered the reference price for low grade material from September 15.

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Trade policy also moved sentiment. Economic and trade consultations between China and the United States were held in New York on September 19 to 23, covering artificial intelligence, tariffs, and critical minerals, and were read by base metals traders as a positive signal for risk appetite. The Indonesian government continued to release supplementary 2026 mining quotas through the RKAB approval process, but a final national quota level had not yet been confirmed, leaving room for further supply news to move the market in either direction.

Downstream signals stayed mixed. Chinese stainless steel mills held operating rates firm ahead of the National Day holiday, while battery precursor demand stayed selective as Chinese cathode makers continued to rebalance chemistry toward LFP grades that need less class one nickel. Battery grade nickel sulphate prices eased by about 50 yuan per tonne on September 22, showing that the electric vehicle battery segment has not yet fully turned into a bullish force for the metal.

For procurement teams, the near term action is to keep coverage on rolling contracts and to plan for continued volatility. Stainless steel mills should confirm October ferronickel and NPI supply from Indonesian and Philippine sources before any confirmed water related output cuts widen the discount on high grade cargoes. Battery precursor buyers should watch Chinese HPAL utilization signals and the shape of any post holiday demand recovery. Trading houses may find room to arbitrage between softer Shanghai stocks and firmer landed cargoes into Europe if Indonesian supply news keeps tightening.