Investment Funds reduced net length in copper, aluminium and zinc in the week to 23 October, with copper accounting for the largest adjustment through another round of long liquidation. Lead moved the other way as its net short narrowed, nickel stayed close to balance, and zinc's combined gross fund exposure rose above half of reported open interest.
TL;DR
- Copper: Net length fell 8,453.29 lots to +25,434.89, driven primarily by 7,820.50 lots of long liquidation.
- Aluminium: Net length declined 3,027.59 lots to +120,376.59, with additional shorts accounting for most of the reduction.
- Zinc: Net length fell 1,292.62 lots to +35,032.19. Combined gross Investment Fund exposure reached 52.50% of open interest.
- Nickel: Net length increased 451.04 lots to +995.90, but both gross books contracted. The position remains close to neutral.
- Lead: The net short narrowed 3,714.87 lots to −29,756.40 through new longs and short covering.
- Tin: Net length increased 44 lots to +1,891.00, a modest change in the smallest fund book of the six metals.
The Positioning Board
The London Metal Exchange's weekly Commitments of Traders reports, published Tuesday 27 October, cover positions held at the close of Friday 23 October. The figures below represent non-risk-reducing Investment Funds positions under the exchange's Other classification.
| Metal | Gross long | Gross short | Net | Weekly Δ net | Holders | Δ holders |
|---|
| Aluminium | 165,353.62 | 44,977.03 | +120,376.59 | −3,027.59 | 308 | −6 |
| Copper | 51,421.26 | 25,986.37 | +25,434.89 | −8,453.29 | 235 | −2 |
| Zinc | 113,873.55 | 78,841.36 | +35,032.19 | −1,292.62 | 307 | +1 |
| Nickel | 45,852.58 | 44,856.68 | +995.90 | +451.04 | 279 | −2 |
| Lead | 35,937.23 | 65,693.63 | −29,756.40 | +3,714.87 | 243 | +1 |
| Tin | 2,601.00 | 710.00 | +1,891.00 | +44.00 | 89 | +1 |
Source: LME MiFID II Weekly Commitments of Traders reports, positions dated 23 October 2026, published 27 October 2026. Figures are in lots. Net positions equal gross longs minus gross shorts. Weekly changes are taken from the current LME reports. Holder counts cover the Investment Funds category in aggregate, including risk-reducing positions.
The 27 October reports imply slightly different prior-week positions from those published in the 20 October reports. Bloodstone Research has documented comparable discrepancies in earlier LME reporting periods. This article uses the positions and weekly changes published by the exchange on 27 October; previously published positions have not been retrospectively restated. The differences do not alter the principal directional findings, and their cause has not been established.
Copper: Another Large Reduction in Long Exposure
Copper recorded the largest deterioration in net Investment Fund positioning for the second consecutive reporting week. Gross longs declined 7,820.50 lots to 51,421.26, while gross shorts increased 632.79 lots to 25,986.37, taking net length down 8,453.29 lots to 25,434.89. Long liquidation accounted for 92.5% of the reduction, with additional shorts responsible for the remaining 7.5%.
That composition distinguishes copper from aluminium and zinc, where the pressure came from the short side. Funds are primarily removing existing bullish exposure rather than building an equivalent new short book. Both movements nevertheless worked in the same direction this week, whereas the preceding edition recorded short covering that partly offset the reduction in longs. The change follows the substantial adjustment reported for 16 October, when copper gross longs fell 8,531.95 lots and net length declined 7,075.21 lots, so the two successive releases establish a sustained reduction in reported long exposure.
The current long book represents 12.44% of open interest against 6.31% for shorts, with combined gross fund exposure at 18.75%, down from 19.85% in the preceding published snapshot. Copper remains net long, but its directional imbalance has narrowed. The figures do not establish whether funds expect lower prices, are reducing risk budgets or are reallocating exposure elsewhere; they establish that a material portion of the previous long book is no longer present. The next report will distinguish continued liquidation from a more substantial increase in outright bearish positioning.
Aluminium: Short Accumulation Drives the Decline
Aluminium retained the largest absolute net long among the six metals, at 120,376.59 lots, and its weekly deterioration was considerably smaller than copper's. The mechanism was also different. Gross longs declined only 444.61 lots to 165,353.62, while gross shorts increased 2,582.98 lots to 44,977.03, so the addition of shorts accounted for 85.3% of the 3,027.59-lot decline in net length. That is a marked change from the preceding report, when both aluminium books contracted and short covering offset much of the reduction in longs. The latest figures instead show a broadly stable long book alongside renewed short accumulation.
Investment Funds remain heavily tilted towards the long side. Gross longs represent 18.55% of open interest against 5.04% for shorts, leaving the long book approximately 3.7 times the size of the short book, and combined gross fund exposure rose to 23.59% from 23.32%. The additional short exposure has not changed aluminium's directional structure, but it has reduced the imbalance between the two sides. Net length has weakened because opposition to the existing long position has grown, not because that position is being liquidated.
Zinc: Gross Fund Exposure Exceeds Half of Open Interest
Zinc's net long fell 1,292.62 lots to 35,032.19. Gross longs declined 482.53 lots to 113,873.55, while gross shorts increased 810.09 lots to 78,841.36, so short accumulation accounted for 62.7% of the reduction. The adjustment was smaller than in the preceding week, when zinc shorts increased 3,447.27 lots, but the direction was unchanged: funds trimmed longs modestly while adding further shorts.
The more significant feature is the scale of the gross positions. Investment Fund longs now represent 31.02% of open interest, with shorts equivalent to another 21.48%, taking combined gross exposure to 52.50% from 50.30% in the previous report. Zinc consequently has the largest reported Investment Fund footprint relative to open interest among the six base metals. This is not a measure of net market control or of the proportion of unique contracts owned by funds; it adds reported gross long and short exposure against the exchange's open-interest denominator.
Both books remain substantial in their own right, with a net long of 35,032.19 lots sitting between gross longs of nearly 114,000 and gross shorts approaching 79,000. A relatively modest change in either side can therefore alter the net figure without changing the scale of Investment Fund participation.
Nickel: Still Close to Neutral
Nickel's net long increased 451.04 lots to 995.90, although the improvement did not result from fresh long buying. Gross longs declined 187.65 lots to 45,852.58 and gross shorts fell 638.69 lots to 44,856.68, so short covering exceeded long liquidation and both gross books contracted. The difference between them is now 995.90 lots against combined gross exposure of 90,709.26, with gross shorts equivalent to approximately 97.8% of gross longs.
Nickel's latest net long of 995.90 lots compares with the 454.88 lots published in the 20 October report. The 27 October report, however, records a weekly increase of 451.04 lots, implying a previous balance of 544.86 lots. The 89.98-lot difference reflects the reporting-vintage discrepancy discussed above. Both published snapshots leave nickel close to neutral, and the current report's gross movements show that the improvement came from short covering rather than additional long buying.
Nickel's long share of open interest is 13.79% against 13.49% for shorts, with combined gross exposure at 27.28%, up from 26.61% despite the decline in absolute gross positions. That illustrates why gross lot movements and exposure shares need to be considered separately: a fund category can reduce its absolute positions while accounting for a larger proportion of the reported market. Nickel remains the clearest example in the complex of a substantial two-sided fund book producing very little net directional exposure.
Lead: Short Covering Narrows the Bearish Position
Lead was the strongest positive mover in net positioning, although it remained the only metal with an outright net Investment Fund short. Gross longs increased 1,642.19 lots to 35,937.23 and gross shorts declined 2,072.68 lots to 65,693.63, improving net positioning by 3,714.87 lots to −29,756.40. Unlike nickel, where both books contracted, lead's improvement came from movements on both sides, with new long exposure accounting for 44.2% of the change and short covering the remaining 55.8%. That also reverses the preceding report, in which lead's net short deepened because long liquidation exceeded short covering.
The short book nevertheless remains substantially larger. Gross shorts represent 25.02% of open interest against 13.69% for longs, and combined gross Investment Fund exposure increased to 38.71% from 37.26%, the second-largest share in the complex after zinc. The improvement therefore reduces the bearish tilt without removing it: a net short approaching 30,000 lots remains material, and the report does not establish that funds are preparing to reverse their overall position, only that the direction of the weekly adjustment has changed.
Tin: A Small Increase in Net Length
Tin's net long increased 44 lots to 1,891, with gross longs rising 38 lots to 2,601 and gross shorts declining six lots to 710. The movement was modest on both sides, and it follows the preceding week's 548-lot decline, when long liquidation and additional shorts reduced the positive balance to 1,847 lots. The latest report therefore shows a partial recovery rather than a reversal of that earlier reduction.
Long positions represent 10.71% of open interest and shorts 2.92%, leaving combined gross fund exposure at 13.63%, up from 12.67% and still the smallest share among the six metals. The Investment Funds holder count increased from 88 to 89, following the previous week's decline of ten holders. Neither movement supports a broader conclusion about renewed participation, and tin's smaller absolute positions require care in cross-metal comparisons.
Open Interest: Zinc and Lead Remain the Outliers
The current reports show substantial differences in the scale and direction of fund exposure relative to open interest.
| Metal | Long / OI | Short / OI | Combined gross / OI |
|---|
| Zinc | 31.02% | 21.48% | 52.50% |
| Lead | 13.69% | 25.02% | 38.71% |
| Nickel | 13.79% | 13.49% | 27.28% |
| Aluminium | 18.55% | 5.04% | 23.59% |
| Copper | 12.44% | 6.31% | 18.75% |
| Tin | 10.71% | 2.92% | 13.63% |
Zinc remains the most heavily represented market on this measure, with substantial positions on both sides, and lead follows principally because of its large short book. Nickel occupies a different position: its combined gross exposure is considerable, but the long and short books almost offset one another. Aluminium retains the largest absolute net long and a pronounced imbalance in favour of longs, while copper's gross fund footprint is smaller and the recent liquidation has reduced it further.
Net positions alone do not capture these distinctions. A near-zero net position can coexist with substantial gross exposure, as nickel demonstrates, and a large net long can remain relatively stable while the composition of the opposing short book changes, as aluminium shows.
What the Weekly Changes Reveal
The six metals divided into three groups during the latest reporting period. Copper, aluminium and zinc recorded lower net length through different mechanisms: copper's decline was overwhelmingly driven by long liquidation, aluminium's came primarily from additional shorts, and zinc combined modest long liquidation with further short accumulation. Lead and tin improved through a combination of new longs and short covering, though the difference in scale was substantial, with lead's net improvement exceeding 3,700 lots against tin's 44. Nickel also improved, but neither gross book expanded; its net position increased because shorts contracted more rapidly than longs.
A falling net long can result from investors closing bullish positions, establishing additional shorts or doing both, and a rising net position can reflect new long buying, short covering or simply a larger contraction in shorts than in longs. The latest reports contain examples of each mechanism, and they do not support a description of uniform selling across the complex, nor do they establish a coordinated rotation between metals, because the COTR identifies reported positions by participant category rather than the motivations or transactions linking individual books.
The clearest development is the continuing reduction in copper long exposure. The largest structural imbalances remain zinc's substantial two-sided fund participation, aluminium's large net long and lead's persistent net short, with nickel close to balance.
The Bottom Line
Copper was the principal source of deterioration in LME Investment Fund positioning during the week to 23 October. Gross longs fell another 7,820.50 lots and the addition of shorts pushed net length down 8,453.29 lots to 25,434.89. Aluminium and zinc also lost net length, but their reductions came more heavily through short accumulation, and zinc's combined gross fund exposure reached 52.50% of open interest, the highest in the complex.
Lead moved in the opposite direction, with new longs and short covering narrowing its net short to 29,756.40 lots, while nickel remained close to neutral and tin recorded only a modest improvement. The current report therefore shows a more divided fund book than the preceding edition: copper longs are being reduced, shorts are growing in aluminium and zinc, and bearish exposure is being unwound in lead. The distinction between those movements is more informative than the net figures alone.
FAQ
Which LME metal recorded the largest net positioning reduction?
Copper. Investment Funds reduced net length by 8,453.29 lots to +25,434.89, primarily through long liquidation.
Is nickel now net short?
No. Nickel remained net long by 995.90 lots, although its gross long and short positions were close to balanced, at 45,852.58 and 44,856.68 lots respectively.
Which metal has the largest Investment Fund exposure relative to open interest?
Zinc, with combined gross long and short exposure equivalent to 52.50% of reported open interest.
Why did aluminium's net long decline?
Primarily because Investment Funds added 2,582.98 gross shorts. Gross longs declined by only 444.61 lots, so short accumulation accounted for 85.3% of the reduction.
Is lead still the only net short among the six metals?
Yes. Lead's net short narrowed to 29,756.40 lots but remained negative, and gross shorts remain equivalent to 25.02% of open interest against 13.69% for longs.
Why do some weekly changes differ from comparisons with last week's published article?
The LME's latest reports imply slightly different prior-week balances from those published in the previous reporting vintage. This article uses the current exchange-reported weekly changes and retains the previously published balances unchanged.
Data and Source Note
All positioning figures are taken from the London Metal Exchange MiFID II Weekly Commitments of Traders reports for Aluminium High Grade (AH), Copper A Grade (CA), Special High Grade Zinc (ZS), Primary Nickel (NI), Lead (PB) and Tin (SN). The reports cover positions dated Friday 23 October 2026 and were published Tuesday 27 October 2026.
The analysis uses the Investment Funds category's non-risk-reducing Other positions. Net positions equal gross longs minus gross shorts, and weekly changes are taken directly from the 27 October reports. Holder counts cover the Investment Funds category in aggregate, including both risk-reducing and non-risk-reducing positions, and are compared with the counts published in the 20 October reports.
Open-interest percentages are those published by the LME. Combined gross percentages add the long and short percentages and should not be interpreted as unique contract ownership or net market share. The LME's COTR includes delta-equivalent options positions, so its open-interest totals are not necessarily identical to those in the exchange's separate market open-interest reports.
All positions are reported in lots, not tonnes. Lot counts are not aggregated across metals because contract sizes and market structures differ.
Sources
London Metal Exchange — Commitments of Traders Reports
London Metal Exchange — MiFID II Position Reporting
Bloodstone Research — LME Positioning Intelligence: Nickel Nears Neutral as Copper Bulls Retreat
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.
