Reuters Column – The big copper short is back as macro fears return: Andy Home

LONDON (Reuters) by Andy Home – The trade war trade has returned with a vengeance as copper and other industrial metals come under sustained fund selling pressure. On the London Metal Exchange (LME) three-month copper fell 11% from $6,443 a tonne at the start of May to a June 7 low of $5,740, its weakest price since the start of January. It has clawed its way back to $5,920 but with bearish funds still massing on the short side it remains to be seen whether this is anything other than a pause for collective breath. Current market dynamics are a rerun of the price weakness in the third quarter of last year, with investors again focused on a deteriorating macroeconomic picture and the knock-on effect on metals demand. And once again macro clouds are obscuring copper’s own resilient fundamentals in the form of weak mine production growth and supply chain disruption. RETURN OF THE BIG SHORT Copper’s price slide has been accompanied by, and in part driven by, a dramatic increase in short positioning by money managers on the CME’s high-grade copper contract. Funds have switched from being net long to the tune of 23,126 contracts in the middle of… continue reading

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