A recent decline in crude steel output and an expected boost in Chinese demand this month, after the Lunar New Year holidays in February, have pushed prices higher, they said.
The metal is mainly used in stainless steel, but demand for battery grade nickel for electric vehicles is expected to boom in as the world moves towards a lower-carbon economy.
Benchmark three-month nickel edged up 1.5% to $16,379 a tonne in official trading but was still on track for a weekly loss of about 11%, its biggest since September 2011.
China announced on Monday weaker-than-expected February activity growth in the manufacturing sector, one of the biggest consumers of industrial metals.