The Lode

Funds Reduce Exposure Across Four LME Metals

Investment funds reduced both long and short positions in aluminium, zinc, nickel and lead in the week to 9 October. Copper and tin increased positions on both sides. Aluminium recorded the largest fall in net length at 5,310 lots, while copper added 2,153. All six metals reconciled exactly with the previous reporting vintage. The LME’s separately classified risk-reducing Investment Fund positions totalled just 56 long lots and 128 short lots across the six contracts, which is why the Other and Total series sit so close together in level.

China’s physical markets were mixed in the first clean trading week since the National Day closure. Copper social inventories rose approximately 12,100 tonnes on delivery-related arrivals, while aluminium ingot and billet stocks fell a combined 69,000 tonnes. Lead’s domestic Pb50 treatment charge fell to zero, leaving no processing allowance in the quoted terms.

Aluminium is this week’s standalone. September LME data show Russian-origin metal at 99.98% of available stocks, not because Russian metal arrived but because Indian-origin stocks fell to 50 tonnes. Chinese smelters ran at 99.7% of effective capacity in August and domestic ingot stocks are below their 2026 low — yet the cash bid fell 5.2% between 30 September and 13 October. Alcoa’s own realised price tells the same story, down to $4,527 a tonne in the third quarter from $4,752 in the second.

LME Positioning Intelligence — Both Books Shrink Across Four Metals

Funds reduced gross longs and shorts together in aluminium, zinc, nickel and lead, while copper and tin expanded both books. Includes an audit of the LME’s separately classified risk-reducing positions.

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China Metals Intelligence — Copper Stocks Rise as Aluminium Draws Down

Copper builds on arrivals and weak consumption at high prices; aluminium withdraws 69,000 tonnes domestically while bonded stocks rise; zinc and lead concentrate terms deteriorate further.

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Aluminium analysis — 2026-10-16

Four measures of availability tightened and the price went the other way. Why a headline inventory figure composed almost entirely of Russian metal has stopped describing available supply.

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LME Investment Fund Positioning

Positions as at 9 October 2026, published 13 October. Investment Funds “Other” positions, in lots. Changes from the corresponding “Other” series.

All six reconcile exactly to the preserved 2 October vintage on both gross books.

Fund Positions as a Share of Open Interest

Combined gross share adds both sides of the book. It measures positioning relative to reported open interest, not the proportion of unique contracts funds control. Lead remains the only net short.

China Physical Signals

Shanghai Metals Market. Weekly comparisons are 8 to 15 October; exceptions identified.

Operating-rate increases in copper rod and aluminium processing substantially reflect post-holiday restarts. Domestic, bonded and product-specific inventory series are not interchangeable.

LME Aluminium Origin — End-September

Russian tonnage fell 3,425 tonnes during September; the share rose because Indian-origin stocks fell 12,400 tonnes. End-September available warrant figures, not total warehouse stocks.

Alcoa: Data Centres Bring Demand and Power Competition

Alcoa’s third-quarter results on 15 October disclosed definitive agreements to sell portions of its former Massena East site in New York, with potential proceeds of up to $315 million — approximately $50 to $65 million at closing depending on approved data centre capacity, and a further $60 to $250 million as capacity is commissioned over seven years. Closing is subject to permitting and regulatory approvals. Chief executive William Oplinger told CNBC the same day that data centre construction was positive for aluminium demand.

The development cuts both ways. Smelting is electricity-intensive, and data centres compete for the same power and grid connections — which is why curtailed smelter sites appeal to developers in the first place. That creates a source of demand alongside a constraint on establishing new primary capacity. The additional tonnes attributable to data centres have not been reliably quantified.

Aluminium fund liquidation. A +124,931.67-lot net long remains after two consecutive weeks of long liquidation. A third would make the unwind harder to read as noise.

LME aluminium origin and spreads. Non-Russian available stocks stood at 50 tonnes at end-September, so there is nothing left to deplete. Any further fall is a fall in Russian metal.

China’s aluminium inventories. Whether withdrawals persist past the restart period, and whether the proportion of liquid aluminium going directly downstream declines as SMM expects, which would lift ingot supply independently of demand.

Lead concentrate terms. At zero, any further deterioration takes the domestic quotation negative for the first time in the series.

Copper inventories. A second consecutive national build would say more about consumption than one week of arrivals does.

Tin inventories. Next week’s survey gives the first clean post-holiday weekly comparison, against Yunnan and Jiangxi smelter utilisation of 29.74%.

Data sources: LME MiFID II Weekly Commitment of Traders reports, positions as at 9 October 2026; LME September 2026 country-of-origin stock data; Shanghai Metals Market surveys and assessments, 15–16 October 2026; Reuters, 14 August, 9 September and 14 October 2026; Alcoa Corporation third-quarter 2026 results, 15 October 2026, and CNBC interview of the same date.

The Lode is published weekly by Bloodstone Capital Research. This document is for informational purposes only and does not constitute investment advice. Independent financial advice should be sought before making any investment decision.