Copper price: Hedge funds slash bullish bets to 16-month low
On Monday copper for delivery in May declined nearly 1% on the Comex market in New York at $3.1095 per pound or $6,855 a tonne amid a general weakness on commodity and financial markets gripped by uncertainty surrounding the Trump administration’s trade policies and the strength of demand from China, the globe’s number one metals consumer.
Copper is now down 5.8% so far in 2018 and the bellwether metal’s dimmer prospects is nowhere more evident than on derivatives markets and the shift in positioning of large-scale derivatives speculators such as hedge funds.
While continuing to add to bullish gold bets, on the copper market hedge funds have slashed long positions – bets on higher prices in future – to the lowest level in 16 months, back when copper was trading around $2.20 a pound ($4,850 a tonne).
According to the CFTC’s weekly Commitment of Traders data up to March 6, so-called managed money investors have reduced net longs to below 28,800 HG copper lots, the equivalent of nearly 720 million pounds or 326,000 tonnes worth $2.2 billion at today’s prices.
That’s a 2.4 billion pound or $7.6 billion decline from record bullish positions held early September last year.
The reduction in bullish positioning on the Comex market has coincided with a huge build-up of warehouse inventories registered with the exchange in the United States. Last week stocks stood at more than 232,000 tonnes, up from below 90,000 tonnes at the start of last year.