LME Nickel approval boosts deliverable supply

LME

LME nickel approval for China’s Jien expands deliverable supply and pressures class-1 prices as inventories swell across SHFE and LME. The LME nickel approval covers full-plate and cut cathodes made after 19 February 2024 at Jilin, with 5,000 t/yr capacity. As a result, total newly approved Chinese class-1 capacity on the LME now stands at 126,600 t/yr. The LME nickel approval arrives amid a surplus of class-1 metal that continues to funnel into exchange warehouses.

Deliverable supply expands after LME nickel approval

Jien’s fast-track listing enlarges the pool of LME-deliverable cathode and improves physical availability. Meanwhile, sellers keep delivering excess class-1 nickel into warehouses, seeking carry returns and balance-sheet relief. This flow has weighed on outright prices and loosened time spreads in recent weeks.

Inventories jump as sellers deliver into warehouses

Exchange stocks have climbed notably since mid-April. SHFE inventories rose from 22,541t to 25,451t, while LME inventories surged from 75,516t to 209,082t. Therefore, the class-1/class-2 spread has tightened, reducing premiums over nickel pig iron. Class-1 nickel is high-purity cathode or electrowon metal typically listed on the LME. Class-2 nickel, mainly NPI from China and Indonesia, contains about 10–14% nickel and feeds stainless mills.

The Metalnomist Commentary

Jien’s listing strengthens China-to-LME optionality and deepens liquidity in class-1 units. However, the approval lands into a stock-heavy market, so price support likely hinges on destocking or a demand surprise from batteries or aerospace alloys. Watch LME/SHFE arbitrage and cash-to-three-month spreads for early signals of a turn.