LME cash nickel closed overnight at US$13,965 per tonne, while three-month nickel was at $14,000/t.
Morgan Stanley said this week fundamental support was shaky for a nickel price of $14,000/t and warned the correction could be as equally as sharp as the lift.
"Our forecast market deficit in 2018 (MSe -45,000t) is easily covered by the 440,000t global inventory," it said.
"We see price supported around marginal cost (MSe $11,133/t), with downside risk from spot in the near-term as supply recovers + demand softens into the Lunar New Year."
Lead was the other big mover, rising by 2.5% to $2686.50/t, its highest price since mid-2011.
Zinc rose to another new 11-year high, eclipsing Monday's record by just $6 to $3606/t.
Cobalt added another $9.50/t to close at a new high of $79,881.50/t as uncertainty remains over the DRC's new mining code.
Tin was lower while copper was flat.
Gold futures were back over $1350 an ounce, while spot gold last traded at $1348.70/oz or A$1677.97/oz.