Last week's bearish structure did not repeat. Investment funds reduced gross longs and gross shorts simultaneously in aluminium, zinc, nickel and lead on the 9 October vintage, while copper and tin were alone in adding to both sides of the book. Not one of the six metals showed the longs-out, shorts-in combination that defined the previous report.
TL;DR
- Copper was the only material net improvement, adding 2,153.29 lots to +40,778.10 with longs up 4,682.79 and shorts up 2,529.50 — a two-sided build rather than one-way conviction.
- Aluminium's net long fell 5,310.27 lots to +124,931.67, 32.84% of the previous week's 16,169.60-lot deterioration, as funds removed 11,202.87 longs but also covered 5,892.60 shorts.
- Zinc lost 3,916.63 lots of net length to +40,060.06 on 6,431.49 longs removed and 2,514.86 shorts covered.
- Nickel's net long fell 1,710.73 lots to +5,059.69, its lowest of the series, though this week the decline came from longs leaving rather than shorts arriving.
- Lead's net short narrowed 1,575.09 lots to −32,011.23, driven by 4,647.07 lots of short covering against 3,071.98 lots of long liquidation.
- Tin added 42 lots to +2,395.00 in a second consecutive improvement.
- Four metals reduced both books; two increased both. No metal reproduced the simultaneous long liquidation and short building seen across four markets a week earlier.
- All six positions reconcile exactly to Bloodstone's preserved 2 October vintage on both gross books.
Investment-Fund Positioning
| Metal | Long | Short | Net | Δ Long | Δ Short | Δ Net | Holders |
|---|
| Aluminium | 171,020.94 | 46,089.27 | +124,931.67 | −11,202.87 | −5,892.60 | −5,310.27 | 309 |
| Copper | 66,857.47 | 26,079.37 | +40,778.10 | +4,682.79 | +2,529.50 | +2,153.29 | 239 |
| Zinc | 114,191.93 | 74,131.87 | +40,060.06 | −6,431.49 | −2,514.86 | −3,916.63 | 307 |
| Nickel | 48,198.15 | 43,138.46 | +5,059.69 | −2,097.30 | −386.57 | −1,710.73 | 280 |
| Tin | 2,988.00 | 593.00 | +2,395.00 | +45.00 | +3.00 | +42.00 | 98 |
| Lead | 38,580.66 | 70,591.89 | −32,011.23 | −3,071.98 | −4,647.07 | +1,575.09 | 241 |
Source: London Metal Exchange MiFID II Weekly COTR reports. Investment Funds, "Other" — non-risk-reducing — positions as at 9 October 2026, published 13 October. Weekly changes are from the corresponding "Other" series. Holder counts are the LME's combined Investment Fund category counts.
The Bearish Structure Did Not Repeat
The defining feature of the 2 October vintage was that four of six metals — aluminium, zinc, nickel and lead — simultaneously shed longs and added shorts. That combination is the clearest positioning evidence of active bearish conviction, because it requires participants to both abandon one side and commit to the other. One week later, not a single metal in the complex shows it.
What replaced it is a cleaner two-way split. Aluminium, zinc, nickel and lead all reduced gross longs and gross shorts together, a reduction in gross positioning across both sides rather than a directional repositioning. Copper and tin moved the other way, increasing both books. In neither group is there a metal where one side grew while the other shrank.
The net outcomes still diverge within each group, because the relative size of the two reductions determines the direction. In aluminium, zinc and nickel the long reduction dominated, so net length fell. In lead the short covering dominated, so the net short narrowed. These are the same mechanical arithmetic producing opposite headline figures, which is why the gross books matter more than the net column this week.
Copper Builds on Both Sides
Copper produced the only material net improvement, with net length rising 2,153.29 lots to +40,778.10. The composition is more interesting than the direction. Funds added 4,682.79 longs and 2,529.50 shorts, a combined increase of 7,212.29 lots of which 64.93% arrived on the long side and 35.07% on the short side.
That is a reversal of the previous vintage, in which both gross books declined — longs by 7,425.09 lots and shorts by 1,492.62. This week both sides expanded instead. Fund long exposure rose from 15.13% to 15.92% of open interest and short exposure from 5.72% to 6.21%, so the increase is visible relative to the market as well as in absolute lots.
Participation also rose, from 235 reporting entities to 239. A build of this composition is better read as renewed two-way engagement in copper than as the beginning of a directional rebuild, and a single vintage will not distinguish between them. The next report will show whether the short book continues growing alongside the long one.
Aluminium's Decline Decelerates Sharply
Aluminium remains the largest net fund long in the complex at +124,931.67 lots, roughly three times the size of copper's or zinc's net positions. Its deterioration this week was 5,310.27 lots, 32.84% of the 16,169.60 lots recorded a week earlier.
The slowdown is not simply a smaller version of the same move. Last week aluminium lost 12,961.85 longs while gaining 3,207.75 shorts. This week it lost 11,202.87 longs — a comparable figure — but also saw 5,892.60 shorts covered, which offset more than half the net impact. The long liquidation has continued at close to its previous pace; what changed is that the short side stopped adding and began reducing.
Fund long exposure fell from 20.14% to 19.09% of open interest, the largest single-metal decline in long share across the complex. Holder counts fell from 312 to 309. Aluminium is therefore a large bullish position still being unwound, but no longer one in which short exposure is simultaneously expanding.
Zinc and Nickel Continue Lower
Zinc's net length fell 3,916.63 lots to +40,060.06, with 6,431.49 longs removed against 2,514.86 shorts covered. This is the fourth consecutive vintage of zinc deterioration, though the mechanism has changed: in each of the previous three reports zinc's short book grew, and this week it shrank.
Zinc remains the most heavily fund-represented market in the complex, with long and short exposure together equivalent to 51.04% of reported open interest, down marginally from 51.28%. Its holder count rose from 305 to 307. The combination of a persistently large fund footprint and four straight weeks of net reduction leaves considerable exposure still to unwind.
Nickel's net long fell 1,710.73 lots to +5,059.69, the lowest reading of the series and down from +13,388.16 on 18 September. The route there differed from last week's. The 2 October decline was driven by 5,296.41 shorts arriving; this week shorts fell 386.57 while longs fell 2,097.30. Nickel is converging on neutral through long positions being removed rather than short positions accumulating, which is a materially weaker signal than the previous vintage implied. The gross gap now stands at roughly 5,060 lots.
Lead Covers Shorts
Lead is the only net short in the complex and it narrowed, by 1,575.09 lots to −32,011.23, after widening 11,640.12 lots the week before. Funds covered 4,647.07 shorts while removing 3,071.98 longs.
The short share of open interest fell from 27.83% to 26.34% and the long share from 15.41% to 14.37%, narrowing the gap between the two from 12.42 points to 11.97. Lead remains the only metal where fund short exposure exceeds long exposure, and the gap remains wide by the standards of the series. Holder counts rose from 236 to 241.
A single week of short covering after a sharp widening does not reverse the structure. It does establish that the previous vintage's expansion was not immediately extended.
Risk-Reducing Positions Are a Small Fraction of the Book
Bloodstone's series uses the LME Investment Funds "Other" row, which excludes positions the exchange separately reports as risk-reducing and directly related to commercial activity. A direct audit of this week's six workbooks, taking the difference between the Total and Other rows, quantifies what that exclusion removes.
| Metal | Risk-reducing longs | Risk-reducing shorts | Net effect on Total |
|---|
| Copper | 34.00 | 97.00 | −63.00 |
| Zinc | 16.00 | 5.00 | +11.00 |
| Aluminium | 5.00 | 13.00 | −8.00 |
| Lead | 1.00 | 10.00 | −9.00 |
| Nickel | 0.00 | 2.00 | −2.00 |
| Tin | 0.00 | 1.00 | −1.00 |
The six reports show that positions classified by the LME as risk-reducing and directly related to commercial activity account for only a small fraction of Investment Fund positions in these contracts. Across the complex, the category contains 56 long lots and 128 short lots, with copper showing the largest net difference between the Other and Total series at 63 lots, or approximately 0.15% of its Other net position. Nickel and tin report no risk-reducing longs at all.
This does not establish how investment funds hedge exposures elsewhere, through other instruments or in other markets. It does demonstrate why the two LME reporting series are numerically close in this vintage, and why the choice between them matters far less than the requirement to use one consistently. Mixing the two across vintages would introduce discrepancies of two to 63 lots that could easily be mistaken for exchange revisions. Bloodstone will continue to use Other consistently for historical comparisons.
Fund Share of Open Interest
| Metal | Long % OI | Short % OI | Combined gross % |
|---|
| Zinc | 30.95% | 20.09% | 51.04% |
| Aluminium | 19.09% | 5.14% | 24.23% |
| Copper | 15.92% | 6.21% | 22.13% |
| Nickel | 14.77% | 13.22% | 27.99% |
| Lead | 14.37% | 26.34% | 40.71% |
| Tin | 11.97% | 2.38% | 14.35% |
The combined gross share sums both sides of the book. It is a measure of positioning scale relative to the market, not of the proportion of unique open-interest contracts funds control.
Outlook
The question the next vintage answers is whether the reduction in gross positioning across aluminium, zinc, nickel and lead continues or stabilises. Reductions on both sides of the book are characteristic of exposure being taken down rather than a directional view being expressed, and such episodes can resolve either into renewed positioning or into continued reduction.
Aluminium carries the most exposure to that question. A +124,931.67-lot net long leaves considerably more to unwind than any other market, and long liquidation has now continued at broadly similar pace for two consecutive weeks even as the short side reversed.
Copper poses the opposite question. Its two-sided build is the only expansion of consequence in the complex, and whether the short book keeps pace with the long book will determine whether this reads as directional or merely as higher participation. Nickel, meanwhile, needs roughly 5,060 lots of further net deterioration to cross into net short, a threshold that two of the past four weekly moves would have been sufficient to breach.
Key Risks
COTR data are point-in-time observations as at 9 October and do not capture trading since. Net positions conceal materially different gross behaviour, as the contrast between lead and nickel in this vintage demonstrates.
The Investment Fund series used throughout is the LME "Other", or non-risk-reducing, position category. Risk-reducing positions and the LME "Total" rows are separate series and are not combined with the historical Bloodstone observations, notwithstanding how small the difference between them proves to be in this report.
Holder counts are reported by the LME at the combined Investment Fund category level rather than separately for risk-reducing and "Other" positions.
Absolute lot positions should not be aggregated mechanically across metals because contract sizes and market structures differ.
Intelligence Monitoring Points
- Aluminium: whether long liquidation continues at pace once short covering stops offsetting it.
- Copper: whether the short book keeps growing alongside the long book, or one side takes control.
- Zinc: whether a fifth consecutive weekly reduction arrives, and from which side of the book.
- Nickel: whether the remaining +5,059.69 net long survives, having fallen by more than 60% in three weeks.
- Lead: whether the short covering extends or the previous vintage's expansion resumes.
- Tin: whether a third consecutive improvement arrives in a market of 98 holders.
- Vintage integrity: whether the next "Other" series again reconstructs exactly to the preserved 9 October observations.
FAQ
What changed in LME fund positioning this week? Four metals — aluminium, zinc, nickel and lead — reduced gross long and gross short positions simultaneously. Copper and tin increased both. No metal showed the long liquidation combined with short building that appeared in four markets a week earlier.
Which metal saw the largest change? Aluminium, with net length falling 5,310.27 lots to +124,931.67. That is 32.84% of its deterioration in the previous vintage.
Is nickel now net short? No. Investment Funds remained net long by +5,059.69 lots on 9 October, the lowest of the series but still positive.
Which metal is most bearish? Lead remains the only net short at −32,011.23 lots, though the position narrowed this week through short covering.
Which metal strengthened most? Copper, adding 2,153.29 lots of net length to +40,778.10, with both the long and the short book expanding.
Do this week's figures reconcile with the previous report? Yes. All six 9 October positions reconstruct exactly to Bloodstone's preserved 2 October long and short books using the LME's reported "Other" weekly changes.
Data and source note: Position data are from the London Metal Exchange MiFID II Weekly Commitment of Traders reports for Aluminium High Grade, Copper A Grade, Special High Grade Zinc, Primary Nickel, Lead and Tin, covering positions as at 9 October 2026 and published 13 October 2026. Bloodstone uses the LME Investment Funds "Other" series, representing positions outside the separately reported "Risk Reducing directly related to commercial activities" category. Current positions are taken from the "Other" row and weekly changes from the corresponding "Change since the previous report — Other" row. The LME "Total" position rows are not used for the Bloodstone non-risk-reducing series; the risk-reducing table in this report is derived as the difference between the Total and Other rows within the same workbooks and is presented separately. All six current positions reconcile exactly to the preserved 2 October vintage on both gross books when the reported "Other" weekly changes are reversed. Holder counts are taken from the LME's combined Investment Fund category. Figures are in LME lots; lot sizes differ by metal and positions cannot be aggregated across the complex.
Sources
