Copper momentum sets new expectations

Funds are more optimistic about copper prices as the market is reassessing the metal’s supply dynamics, Reuters reports.

Money managers are now marginally net long for copper on both the London Metal Exchange (LME) and CME contracts.

There was a shift in positioning at the end of October with fund managers collectively net short of CME copper to the tune of 21 553 contracts. The LME three-month copper price was on the verge of breaking through key support at May lows between US$ 7 867 and US$ 7 871 per tonne.

Soon after, the LME copper price recovered to US$ 8 530. This rebound sparked new expectations among short-term funds. The latest Commitments of Traders Report cites a collective net long of 6 866 contracts.

The shift reflects a sharp reduction in short positions; down from 76 717 contracts to 46 558 contracts. Meanwhile, long positions are relatively stable.

Investment funds have collectively flipped from a net LME short position of 15 116 contracts in October to a net long position of 15 046 contracts. Market analysts  point out that bear bets fell from 47 714 contracts to 25 674.