Global Trade
June 30, 2026
LME positioning eases as aluminum prices retreat
Written by Nicholas Bell
Participants across the London Metal Exchange (LME) aluminum market reduced outstanding positions during June as aluminum prices declined and immediate supply concerns eased.
Unlike the sharp increase in participation observed during the rally earlier this year, the latest Commitment of Traders data showed nearly every participant category reducing both long and short exposure. Commercial undertakings also reduced positions, continuing a broader pattern that has distinguished the subset of market participants from the rest of the market over the past year.
Position reductions alongside lower prices
LME cash aluminum settled at $3,146 per metric ton on June 26, the final trading day of the week covered by the latest Commitment of Traders report published Tuesday, down from $3,725 per metric ton on May 29, the final trading day of the comparable reporting week a month earlier.
The LME aluminum forward curve also returned to contango after several months in backwardation. Contango occurs when forward contracts trade above the prompt price. Backwardation describes the opposite relationship, with prompt material trading above forward prices.
Over the same period, total reported long and short positions across all participant categories declined by about 10.6%.
Investment firms and credit institutions, which accounted for more than half of all reported long and short positions across the four participant categories, reduced total positions by 8% month over month. Long positions declined 6.5cons%, while short positions fell 9%.
Investment funds recorded the largest reduction in total positions, down 51%. Long positions declined 25%, while short positions fell 31%. The number of reporting funds, however, increased to 313 from 305, indicating existing participants reduced exposure rather than exited the market.
Commercial undertakings also reduced exposure. Total positions declined about 7.6%, with long positions down 5% and short positions down 9.5%.
Other financial institutions, the smallest reporting category by outstanding positions, reduced total positions by 17%. Short positions declined by nearly twice the percentage recorded for long positions.
Across all four participant categories, both long and short positions moved lower during the month, while the number of reporting participants changed relatively little in most categories.
Higher volume accompanies lower open interest
The reduction in outstanding positions also coincided with higher trading activity on the exchange.
Average daily futures volume increased to about 338,600 contracts during the week ended June 26 from about 244,300 contracts during the comparable week ended May 29. Average daily options volume eased to about 26,900 contracts from roughly 31,000 contracts over the same period.
Trading volume measures the number of contracts exchanged during a session, while open positions measure contracts that remain outstanding after trading concludes. As a result, lower open positions can coincide with higher trading volume if participants actively close existing positions.
Options give holders the right, but not the obligation, to buy or sell a futures contract at a predetermined price before expiration. They are commonly used to manage price risk.
Futures trading activity also became more uneven during the week. Daily volume exceeded 400,00 contracts on two sessions, including one above 500,00 contracts, before easing by the end of the week.
The reporting week coincided with changing developments in the Middle East as aluminum prices retreated from recent highs.
The week ended June 26 was the first full trading week following the signature of a memorandum of understanding between US President Trump and Iranian President Masoud Pezeshkian.
June pullback leaves broader trends intact
Aluminum prices declined through the month as immediate supply concerns moderated. Initial reports also indicated shipping traffic through the Strait of Hormuz had begun to resume following disruptions for months.
Every reporting category reduced both long and short positions during the month, but short positions declined by a larger percentage than long positions.
Nevertheless, the latest report didn’t materially alter one of the longer running themes within the Commitment of Traders data.
Over the past year, investment funds, investment firms or credit institutions, and other financial institutions each increased their combined long and short positions before reducing exposure during June.
Commercial undertakings, by contrast, entered June with fewer position holders and lower combined positioning than a year earlier before recording another modest monthly decline.
June positioning pointed to a market reducing exposure as prices retreated and near-term supply concerns moderated. Yet, the broader pattern remained intact.
Despite June’s pullback, each financial category reported higher combined positions than a year earlier, while commercial undertakings continued to report fewer participants and lower combined positioning than a year ago.
