23 April 2024: COTR data on LME speculative positions (for the week ending 19 April) were released this afternoon. The data showed that speculators were bullish across the complex, with net longs increasing, with the notable exception of tin. However, aluminium and zinc have both seen the increase in net longs starting to slow, which warns that these markets are becoming less bullish. Tin has already seen a fall in net speculative longs, due to fresh shorts and long liquidation.
For nickel, net speculative positions remained low relative to the historical range, at 33%. For aluminium, lead and zinc the net speculative position is in the middle of the range. By contrast, copper and tin both looked overextended at 85% and 96%, respectively. 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/.
