European nickel premium hit a record high in 2022 due to the Russia-Ukraine war, rising underlying nickel prices on the London Metal Exchange (LME), and decreasing stocks in LME warehouses, which impacted the spot market a lot.

After entering 2023, most market participants expected that the spot premium might become stable. The reasons were the uncertainty on supply from Russia, the main European melt source, benchmark nickel prices fluctuating, and continued inflationary pressures on logistics and freight.

Some European buyers prefer spot purchases rather than the deployment of term-contracts. Also, the demand from stainless steel manufacturers will keep low as the European economy maintains weaken.