23 July 2024: Data on LME COTR speculative positions (for the week ending 19 July) were released this afternoon. The data show that speculators turned aggressively bearish, with net positions falling for all the six base metals. In most cases, long liquidation combined with fresh shorts to drive positions lower. Nickel was slightly less bearish, as fresh longs were seen, as speculators tried to pick a floor for prices.
For nickel, net speculative positions remained low relative to the five-year historical range, at 7%. For aluminium, copper, lead and zinc, the net speculative position was reasonably close to the middle of the range. By contrast, tin still looked overextended at 77%, although this was down from 100% the week before. A high percentage indicates an increased chance of mean-reversion in the months ahead and lower prices.
We explained in our research piece that we use the trend in the categories “Investment Funds” and “Other Financial Institutions” combined for this report, because this total has a close correlation with LME price trends. The report can be found here: https://amt.co.uk/amt-insight-lme-cotr-follow-the-money/.
