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Copper traders probably reduced bets that prices will drop as the number of outstanding futures contracts fell to a two-year low as prices rose.
Open interest in London Metal Exchange copper futures dropped by 14,362 contracts to 412,893 lots in the week ended July 19, according to exchange data on Bloomberg. The number fell to 409,828 on July 18, the lowest since February 2010, exchange data show. Copper for delivery in three months rose 2.3 percent over the period.
A combination of decreasing open interest and higher prices suggests traders are covering their bets on lower prices, according to Macquarie Group Ltd.
Open interest in the five other industrial metals traded on the LME also declined in the week as prices rose.
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 19, along with price changes.
Change in Lots % Price Change Aluminum -43,134 3.3 Copper -14,362 2.3 Zinc -13,025 2.4 Lead -12,205 4.0 Nickel -4,170 1.8 Tin -1,046 3.2
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