14 May 2024: COTR data on LME speculative positions (for the week ending 10 May) were released this afternoon. The data showed mixed trends for the base metals. Copper, lead, tin and zinc all looked bullish at first glance, with an increase in net speculation. However, lead, tin and zinc all saw significant short-covering, which is a weak bullish signal, while only copper saw significant amounts of fresh longs, which is a strong bullish signal. By contrast, aluminium and nickel looked bearish with net speculation falling.
For nickel, net speculative positions remained low relative to the historical range, at 36%. For aluminium and zinc, the net speculative position was close to the middle of the range. By contrast, copper, lead and tin looked overextended in the range 73-95%. 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/.
