Last week three different mechanisms produced one direction: copper liquidated longs, aluminium and zinc attracted shorts, nickel moved the other way. This week there is only one mechanism. Investment funds added shorts in all six metals to 18 September, and in aluminium and lead they added longs at the same time, so the gross books expanded rather than one side withdrawing. Net length fell in five of six for a second consecutive week.
TL;DR
- Aluminium added 8,999.74 shorts, growing the short book 23.4% in a single week from the smallest fund short share of open interest in the complex. Net length fell 3,542.15 lots to +144,059.56.
- Zinc's short book grew a further 4,785.25 lots to 70,170.25 while longs fell again, taking net length to +53,734.10 and the fund share of short open interest to 18.50%.
- Nickel, the only metal funds bought last week, reversed. Net length fell 2,898.58 lots to +13,388.16 on 3,615.91 new shorts against 717.33 longs.
- Copper's liquidation stopped but bears arrived: longs rose 500.90 lots and shorts 1,455.58, leaving net length at +39,818.70 on a reported change of −954.68.
- Lead was the only improvement, at +641.04 lots to −25,138.88, produced by the largest gross expansion in the complex — 8,505.75 new longs against 7,864.71 new shorts.
- Tin fell 512.00 lots to +1,920.00, a 21.6% reduction, with holder counts down to 94.
- Every metal's short book grew. Aluminium's rose 23.4%, lead's 13.3%, nickel's 10.9%, zinc's 7.3%, copper's 6.0% and tin's 6.0%.
- All figures are LME Investment Funds, non-risk-reducing, reported in lots. Lot sizes differ by metal and positions cannot be aggregated across the complex.
Investment-Fund Positioning Board
| Metal | 18 Sep long | 18 Sep short | 18 Sep net | LME reported Δ net | Δ longs | Δ shorts |
|---|---|---|---|---|---|---|
| Aluminium | 191,475.41 | 47,415.85 | +144,059.56 | −3,542.15 | +5,457.59 | +8,999.74 |
| Zinc | 123,904.35 | 70,170.25 | +53,734.10 | −5,389.16 | −603.91 | +4,785.25 |
| Copper | 65,470.47 | 25,651.77 | +39,818.70 | −954.68 | +500.90 | +1,455.58 |
| Nickel | 50,299.86 | 36,911.70 | +13,388.16 | −2,898.58 | +717.33 | +3,615.91 |
| Tin | 2,640.00 | 720.00 | +1,920.00 | −512.00 | −471.00 | +41.00 |
| Lead | 41,947.01 | 67,085.89 | −25,138.88 | +641.04 | +8,505.75 | +7,864.71 |
Source: London Metal Exchange MiFID II Weekly COTR reports, positions as at 18 September 2026, published 22 September 2026. Weekly changes are those reported by the LME in the 18 September files. The prior-period positions implied by those changes reconcile exactly with the 11 September vintage in five of the six metals; tin is the exception, where the implied prior net is 2,432 lots against the 2,448 published on 15 September. Bloodstone Research preserves each contemporaneous LME vintage rather than retrospectively replacing previously published figures.
In tonnage terms, the reported weekly changes represent reductions of 134,729 tonnes in zinc, 88,554 in aluminium, 23,867 in copper, 17,391 in nickel and 2,560 in tin, against a 16,026-tonne narrowing of lead's net short. Lot sizes are 25 tonnes for aluminium, copper, zinc and lead, six for nickel and five for tin.
The more useful measure this week is the short side. Funds added 224,994 tonnes of aluminium shorts, 196,618 of lead, 119,631 of zinc, 36,390 of copper and 21,695 of nickel. That is a coordinated build across the complex, and it is what distinguishes this week from last.
Market Share and Participation
| Metal | Fund long, % of OI | Fund short, % of OI | Position holders |
|---|---|---|---|
| Zinc | 32.67% | 18.50% | 302 |
| Aluminium | 21.42% | 5.30% | 308 |
| Nickel | 15.82% | 11.61% | 282 |
| Lead | 15.75% | 25.19% | 238 |
| Copper | 15.54% | 6.09% | 234 |
| Tin | 11.42% | 3.11% | 94 |
Source: London Metal Exchange MiFID II Weekly COTR reports, positions as at 18 September 2026. Open-interest shares are as published for the Investment Funds category, non-risk-reducing. Holder counts are the exchange's combined figure for all Investment Funds positions in each contract.
Every short-side share in the complex rose. Aluminium moved from 4.19% to 5.30%, zinc from 16.51% to 18.50%, nickel from 10.21% to 11.61%, lead from 23.90% to 25.19%, copper from 5.67% to 6.09% and tin from 2.74% to 3.11%. In aluminium and lead, the absolute long and short books both expanded, confirming that those two markets attracted additional fund positioning on both sides rather than simply losing longs.
Participation was broadly stable. Zinc and lead each added two holders, while aluminium, copper, nickel and tin each lost between one and four. Nothing in the holder counts suggests the week's flows came from a narrowing group, though the reports do not disclose how positions are distributed within the category.
Aluminium: The Rebuild Arrives at Speed
The observation made here for two consecutive weeks was that aluminium's net long depended on an unusually thin short base, with funds holding just 4.19% of short open interest — the smallest short share in the complex. That base is now being rebuilt quickly. Shorts added 8,999.74 lots, taking the book from 38,416.11 to 47,415.85 — growth of 23.4% in a single week, and the largest short build in the complex by both lots and tonnage.
What complicates the reading is that longs grew too, by 5,457.59 lots to 191,475.41. Total gross fund positioning in aluminium expanded by 14,457.33 lots across the week, so this is not a bullish book being dismantled. It is a market attracting participation on both sides, with the bears arriving faster.
The net position nevertheless fell 3,542.15 lots to +144,059.56, its second consecutive weekly decline, and the ratio of gross longs to gross shorts narrowed from 4.84 to one to 4.04 to one. Aluminium remains by a wide margin the largest fund net long in the complex, at roughly 3.6 million tonnes equivalent, and its 308 holders remain among the widest participation. But the structural feature that made it distinctive — an almost absent bear side — is eroding at pace.
Lead: The Largest Two-Sided Build
Lead produced the only net improvement, narrowing 641.04 lots to −25,138.88, and it did so through the largest gross expansion in the complex. Funds added 8,505.75 longs and 7,864.71 shorts, expanding total gross positioning by 16,370.46 lots in a week.
The structural position is unchanged and worth restating. Lead is the only metal where funds hold a larger share of short open interest than long, now 25.19% against 15.75%, with both figures higher than a week earlier. So while the net short narrowed, funds became a larger presence on both sides of a market in which they are already the most bearishly positioned.
That makes the improvement difficult to read as conviction. A net short narrowing while the gross short book grows 13.3% describes engagement rather than retreat, and the long side grew marginally faster only in a market where the bears start from a much larger base.
Zinc: Three Weeks of Short Building
Zinc's short-building pattern has now run for three consecutive reporting weeks, with shorts adding 3,067.46, then 3,305.69, then 4,785.25 lots — an accelerating sequence totalling 11,158.40 lots. Net length finished at +53,734.10, down 5,389.16 lots or 134,729 tonnes, the largest tonnage reduction in the complex.
The long side has been less consistent. It added 4,667.72 lots three weeks ago before falling 216.00 and then 603.91, so across the full three weeks the long book has still grown by 3,847.81 lots, while contracting 819.91 across the last two. The monitoring question set here last week was whether the paused long side would resume buying. It has not, but neither has it begun liquidating.
The market-share data give the short build more weight than the lot total alone. Funds now hold 32.67% of zinc long open interest and 18.50% of short, the largest presence on both sides in the complex and higher on both than a week ago. The short book of 70,170.25 lots is the largest absolute short position among the five net-long metals.
Nickel: The Exception Reverses
Nickel was the only metal funds bought to 11 September, adding 1,129.79 lots of net length. That reversed within a week. Net length fell 2,898.58 lots to +13,388.16, a reduction of 17.8%, as funds added 3,615.91 shorts against 717.33 longs.
The mechanics have now inverted twice in three weeks, which is itself informative: nickel's book is the most balanced in the complex, at 50,299.86 longs against 36,911.70 shorts and open-interest shares of 15.82% and 11.61%, so relatively small flows move the net position materially. The 2,898.58-lot change is 17,391 tonnes at a six-tonne lot, against zinc's 134,729.
The reversal is nevertheless worth noting against the physical evidence. Bloodstone's nickel analysis observed that fund positioning and firming Chinese refined pricing were, unusually, pointing the same way — while LME stocks continued building to 278,790 tonnes on 17 September. Only the stock signal has persisted.
Copper and Tin
Copper's liquidation stopped. After shedding 5,692.43 gross longs in the week containing its record high, funds added 500.90 longs to 65,470.47. But shorts grew 1,455.58 to 25,651.77, so net length still fell 954.68 lots to +39,818.70 — a materially smaller reduction than last week's 5,233.83, achieved through the opposite mechanism. The fund share of copper short open interest rose from 5.67% to 6.09%, and holders fell from 238 to 234.
Tin fell 512.00 lots to +1,920.00, a 21.6% reduction and the largest proportional decline in the complex, on 471.00 lots of long liquidation. At a five-tonne lot that is 2,560 tonnes. Tin is also the one metal where the vintage does not reconcile: the reported changes imply a prior long of 3,111.00 and short of 679.00, against the 3,119.00 and 671.00 published on 15 September. The LME-reported weekly change is 512.00 lots; measured vintage to vintage it is 528.00. Tin's holder count fell to 94, the smallest in the complex by a wide margin, and its long-side open-interest share fell from 12.73% to 11.42%.
One Mechanism, Six Metals
Last week's conclusion was that a consistent net direction concealed three different mechanisms. This week the mechanism has converged with the direction: every metal's short book grew, and five of six saw net length fall.
The composition still varies. Aluminium and lead expanded on both sides, with longs growing 5,457.59 and 8,505.75 lots respectively — these are markets attracting new participation rather than shedding it. Zinc and tin saw long books contract alongside short growth. Copper and nickel added marginally on the long side while the short side grew several times faster.
What ties them together is that the bearish side of the category grew everywhere, in a week when no metal saw its short book shrink. That has not been true in any recent reporting week, and it is a different signal from the selective reduction described here over the previous fortnight.
The prices give that context. This is still reduction into relative strength rather than liquidation into a falling market: aluminium's net long remains the largest in the complex, zinc's is still above 53,000 lots, and copper's long book grew. What the data do not establish is why. The COTR records what funds did, not what they concluded, and coordinated short building is consistent with hedging elevated exposure, with a change of view on the complex, or with position management ahead of the quarter end. Distinguishing between those requires the physical and spread evidence rather than the positioning files.
Outlook
Base case: Short books continue to grow from levels that remain low relative to long positioning in four of six metals, with net length eroding gradually rather than collapsing. Aluminium's short share continues rebuilding towards the complex average, and zinc's long side stays paused.
Upside risk: The short build reverses in the first October reports rather than developing into sustained bearish positioning. Copper's long rebuild extends, and aluminium's new shorts retreat in a market where funds still hold only 5.30% of short open interest.
Downside risk: The pattern extends into a third consecutive week of falling net length with short books growing across the complex. Zinc's long side begins liquidating alongside its short build, and aluminium's net long — the largest in the complex — erodes materially from 144,059.56 lots.
What would change the view: A week in which gross short books shrink in two or more of the 25-tonne markets would mark the end of this pattern. Sustained growth in gross longs without matching short growth would indicate the return of directional conviction rather than two-sided engagement.
Key Risks
- Positions are point-in-time. The reports capture 18 September and reveal net weekly change, not the sequence within the week.
- Gross expansion is not the same as bearishness. Aluminium and lead added longs as well as shorts; reading either as a one-way bet misstates what the files show.
- Lot sizes differ. Nickel's 17.8% net reduction is 17,391 tonnes against zinc's 134,729 on a smaller proportional move.
- Tin's vintage does not reconcile. The implied prior net differs from the published 11 September figure by 16 lots, so the LME-reported change and the vintage-to-vintage comparison differ.
- Small bases exaggerate. Tin's 21.6% decline involves 2,560 tonnes across 94 position holders.
- Longs and shorts do not balance. The LME's delta-hedge methodology means the two sides need not reconcile, and the exchange reports the larger side as total open interest.
- Basis matters within the category. These are the non-risk-reducing figures; the Investment Funds total basis differs.
- Coordinated short building is ambiguous. Position management, hedging and a genuine change of view produce the same weekly numbers.
Intelligence Monitoring Points
- Aluminium's short book, at 47,415.85 lots and 5.30% of open interest after a 23.4% weekly increase, as the clearest measure of how far the rebuild runs.
- Zinc's long side, which has neither resumed buying nor begun liquidating across the last two reports.
- Whether any short book shrinks in the next report, after a week in which all six grew.
- Copper's gross longs, at 65,470.47 after a modest rebuild, and the outstanding US refined-copper tariff question.
- Nickel positioning against LME stocks, after the fund side reversed while inventory continued building.
- Lead's gross expansion, at 16,370.46 lots in a week, and whether it continues to skew bearish.
- Tin's holder count, at 94, as the narrowest participation in the complex.
FAQ
What changed this week? The mechanism. Last week's reduction came from copper long liquidation; this week every metal's short book grew, and net length fell in five of six for a second consecutive week.
Which metal moved most? Zinc by tonnage, at 134,729 tonnes, and tin proportionally at 21.6%. Aluminium saw the largest short build at 8,999.74 lots.
Did funds turn bearish aluminium? Not straightforwardly. Shorts grew 23.4%, but longs also grew 5,457.59 lots and the net long remains the largest in the complex at +144,059.56.
Is lead's improvement bullish? It narrowed 641.04 lots, but through the largest gross expansion in the complex. Funds now hold 25.19% of lead short open interest against 15.75% of long, both higher than a week earlier.
What happened to nickel? It reversed. After being the only metal funds bought to 11 September, net length fell 17.8% on 3,615.91 new shorts.
Why does tin's change not match last week's figure? The reported changes imply a prior net of 2,432 lots against the 2,448 published on 15 September. Bloodstone preserves each contemporaneous vintage, so both the LME-reported change of 512.00 lots and the vintage-to-vintage figure of 528.00 are given.
Data and source note: London Metal Exchange MiFID II Weekly COTR reports for aluminium, copper, zinc, nickel, lead and tin, positions as at 18 September 2026 and published 22 September 2026, with weekly changes as reported by the exchange in those files. Position figures, weekly changes and open-interest shares refer to the LME Investment Funds category, non-risk-reducing, and positions are reported in lots throughout; position-holder counts are the exchange's combined figure across the category and indicate breadth of participation only. Tonnage equivalents use contract sizes of 25 tonnes for aluminium, copper, zinc and lead, six tonnes for nickel and five tonnes for tin. The prior-period positions implied by the reported changes reconcile exactly with the 11 September vintage in aluminium, copper, zinc, nickel and lead; in tin they differ by eight lots on each side. Bloodstone Research preserves each contemporaneous vintage rather than retrospectively replacing previously published figures. Open-interest shares are reported as published; total open interest is not disclosed in these files and has not been derived. Longs and shorts need not balance owing to the exchange's delta-hedge methodology, and the LME reports the larger side as total open interest. COTR data are point-in-time positions and do not describe activity after the reporting date.
Sources
- London Metal Exchange
- London Metal Exchange — Commitments of Traders Report
- Bloodstone Research — Zinc analysis, 24 September 2026
- Bloodstone Research — LME Positioning Intelligence: Copper Longs Liquidate Into the Record
- Bloodstone Research — Nickel analysis, 18 September 2026
This document is published by Bloodstone Research for informational and institutional research purposes only. It does not constitute investment advice, an investment recommendation, an offer or solicitation to buy or sell any financial instrument, commodity or security, or a forecast of future performance. Market conditions and data may change without notice. Readers should conduct their own analysis and, where appropriate, seek independent professional advice before making investment decisions. For institutional enquiries contact research@bloodstonecapital.co.uk.