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LME cash nickel gained 8.8% to $18,004 per tonne.
The reason for the move was due to an Indonesian official reportedly confirming a ban on nickel ore exports from December.
UBS said the move could potentially impact around 200,000 tonnes of supply next year, or about 8% of global output.
Still, even before Friday's rally, Argonaut Securities analyst Helen Lau said the rise in nickel was overdone
"We are increasingly convinced that a price correction is in the offing for a couple of reasons. Firstly, the huge put options built on shorting nickel," she said.
"History shows that there is limited time allowed for divergence. Secondly, with regard to fundamentals, the stainless-steel inventory in China keeps rising, breaking record highs at 524,000t continuously, up 23% year-on-year and 78% year to date.
"Thirdly, the stainless-steel price has been hammered down, wiping out the rally in the past few months, down 3% year-on-year and up only 2% year to date. As stainless-steel accounts for circa 70% of nickel demand, a price weakness in stainless steel driven by sluggish demand should prelude that a price consolidation in nickel is long overdue."
Friday's other big mover was iron ore, with the MySteel 62% iron ore fines price jumping 4.4% to US$84.80 per tonne.
ASX futures were slightly lower ahead of the opening bell after a flat day on Wall Street ahead of the Labor Day long weekend.
