Bloomberg reported that nickel traders probably added to wagers on falling prices last week as the number of outstanding futures contracts climbed to the highest in at least seven years at the same time as prices declined.
Exchange data showed that open interest in London Metal Exchange nickel futures rose by 9,160 contracts to 176,378 lots in the week to July 12th 2012, the highest level since at least September 2005. Nickel for delivery in three months, the benchmark contract, declined 5.5% over the period. One contract is for 6 tonnes of the metal used to make stainless steel.
According to Macquarie Group Limited, a combination of higher open interest and lower prices suggests bets on a falling market. Nickel slumped on July 12th 2012 as much as 2% to USD 15,770 a tonne, the lowest price since December 2009.
Open interest in copper, zinc and lead all fell as prices declined, suggesting long positions were being liquidated. Aluminum open interest rose at the same time prices fell, suggesting new bets on lower prices.
Following are changes to market open interest for LME members and clients compiled by the exchange for the six biggest industrial metals futures traded on the bourse in the week ended July 12th 2012, along with price changes.
|Item||Change in Lots||% Price Change|
Source - Bloomberg