Tin Open Interest Signals Traders Shifted to Bullish Outlook

The number of tin futures outstanding on the London Metal Exchange reached a two-week high at the same time that prices climbed, signaling traders turned bullish on the metal.

Open interest in tin came to 28,898 futures contracts as of July 31, up 4.3 percent from a week earlier and the highest since July 16, LME figures showed. Prices advanced 4.6 percent in the week. Each contract represents 5 metric tons of tin, used mostly to make solders for joining metals together.

A combination of higher open interest and climbing prices suggests new long positions, or bets on a rising market, according to Macquarie Group Ltd. Tin reached the highest level in almost two months today on the LME.

Open interest in copper, aluminum, zinc and nickel rose in the week through July 31 as prices fell, suggesting new short positions, or bearish wagers.

“While the market is still short and vulnerable to a squeeze, the extremity of short interest and subsequent intensity of a squeeze-type event has started to drop,” analyst George Adcock at Marex Spectron Group in London said by e-mail today.

Following are changes to market open interest for both LME members and their clients for the exchange’s six main industrial-metals futures in the week ended July 31. The figures were compiled by the LME.

                 Change in           Price Change
               Open Interest             (%)

Aluminum            24,844              -2.5
Copper               7,179              -2.5
Zinc                 8,525              -2.2
Lead                 1,195               0.2
Nickel                  16              -3.4
Tin                  1,197               4.6
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