Insights 
VT 
Nickel prices have underperformed among major base metals this year, gaining only about 1% so far. Zinc, previously the worst performer, has now surpassed Nickel in performance.
The International Nickel Study Group forecasts a favourable supply outlook for Nickel, despite efforts by Indonesia to regulate production. Nickel production is expected to grow by 8% this year and 7% next year. Demand is set to grow at a slower pace, increasing by 5% this year and 6% next year, potentially leading to a rise in the supply surplus.
In contrast, Copper’s supply outlook has worsened. The International Copper Study Group initially projected a supply surplus of almost 300,000 tons but revised it down to 178 thousand tons. Next year, a supply deficit of 150 thousand tons is expected due to weaker growth in metal production, which is projected to rise by less than 1% after a 3.4% increase this year.
The Copper market illustrates the volatility of supply due to unexpected production outages. The Nickel market is similarly at risk, given Indonesia’s capacity to influence global supply, holding around 60% of global mine production. Indonesian regulatory efforts may create price fluctuations for Nickel.
Based on the current date of October 10, 2025, the outlook for nickel remains poor due to a significant supply surplus. We’ve seen LME nickel prices struggling around $16,500 per tonne for weeks, reflecting a market where production growth is outpacing demand. LME warehouse inventories have also recently climbed above 100,000 tonnes, a multi-year high, confirming this oversupply.
For traders, this suggests that bearish positions on nickel could be advantageous in the coming weeks. We believe strategies such as buying put options or establishing bear put spreads could capitalize on further price weakness while defining risk. However, it is critical to monitor political news from Indonesia, as any sudden export restrictions from the world’s largest producer could cause a sharp, unexpected price rally.
Conversely, copper’s narrative has shifted dramatically towards a tightening market, justifying its recent strength above $9,500 per tonne. The market has been rattled by consistent production downgrades from major South American mines throughout 2025, which has quickly eroded the previously expected supply surplus. The updated forecast now points to a deficit of 150,000 tons for 2026, a major reversal from projections made earlier this year.
Given that the recent price surge may be overextended in the short term, we see opportunities in waiting for a pullback. Traders could consider selling cash-secured puts at lower strike prices, such as $9,000, to collect premium while waiting for a better entry point. For those with a longer-term bullish view into 2026, using bull call spreads can be a cost-effective way to position for continued upside.
