Nickel prices have held on to gains throughout the last trading session, closing near 14-month highs as the metal's fundamental picture tightened.

At the close of open-outcry trading on Friday, LME 3-month nickel was 1.9 per cent higher at $US17,390 a metric ton

LME copper closed up 0.2 per cent at $US6,669 a ton, while aluminium corrected after strong gains during the week, closing 0.5 per cent down on the day, at $US1,883.25 a ton.

"The most important reason for the price rise is the export ban on unprocessed ore from Indonesia that was introduced this year," said analysts at Commerzbank.

The nickel contract has increased by about 23 per cent this year, driven by factors including a ban on exports of unprocessed ore by Indonesia and tensions over Ukraine. Indonesia is one of the biggest producers of high-quality ore and Russia's OAO Norilsk Nickel Metal and Metallurgical Co is world's largest producer of the metal. Russia last year accounted for 12 per cent of the global nickel supply.

China started stockpiling nickel well ahead of the Indonesian ban, which took effect on January 12, but strong demand there and dwindling imports have sent domestic prices higher.

"Indonesian ore shipments are extremely important for the nickel market, meaning that fears of a massive tightening of supply in the coming years are not entirely unfounded," said the Commerzbank analysts.

"That said, it is by no means obvious that nickel will see a further sustained and sharp price increase."