Nickel prices have not performed well compared to other base metals this year, with only a 1% increase so far. Zinc, once the worst performer, has now outpaced Nickel. The International Nickel Study Group predicts that Nickel will have a strong supply outlook, even with Indonesia’s efforts to regulate production. Nickel production is expected to grow by 8% this year and by 7% next year. However, demand will rise more slowly, increasing by 5% this year and 6% next year. This difference may lead to a larger supply surplus. On the other hand, Copper’s supply outlook has worsened. The International Copper Study Group initially expected a surplus of nearly 300,000 tons but has adjusted this estimate down to 178,000 tons. Next year, a supply shortfall of 150,000 tons is expected due to slower growth in metal production, which is forecasted to rise by less than 1% after a 3.4% growth this year. The Copper market shows how supply can be unpredictable due to unexpected production disruptions. The Nickel market faces similar risks, especially since Indonesia controls about 60% of global Nickel production. Regulatory changes in Indonesia could lead to price fluctuations for Nickel. As of October 10, 2025, the outlook for Nickel is not good because of a large supply surplus. LME Nickel prices have been stuck around $16,500 per tonne for weeks, indicating that production growth is outpacing demand. LME warehouse stocks have also climbed above 100,000 tonnes, the highest in several years, highlighting this oversupply. For traders, this signals that taking bearish positions on Nickel may be beneficial in the coming weeks. Strategies like buying put options or creating bear put spreads could take advantage of further price declines while managing risk. However, it’s important to keep an eye on political developments in Indonesia, as any sudden export restrictions from the top producer might trigger a sharp price increase. In contrast, the situation for Copper has changed dramatically, leading to stronger prices above $9,500 per tonne. Continuous production cuts from major South American mines throughout 2025 have quickly diminished the previously expected supply surplus. The latest forecast now suggests a deficit of 150,000 tons for 2026, a significant shift from earlier predictions. Given the recent price jump, it may be wise to wait for a short-term pullback. Traders might consider selling cash-secured puts at lower strike prices, like $9,000, to earn premium while waiting for a better buying opportunity. For those with a long-term optimistic outlook into 2026, employing bull call spreads can be a cost-effective way to prepare for continued price increases.

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