Copper traders may have bought futures to close out bets on a falling market as the number of contracts outstanding touched the lowest in almost four months at the same time that prices retreated.

Open interest in London Metal Exchange copper futures came to 396,808 contracts, the lowest level since Sept. 4, as of Dec. 28, LME figures showed. That was a drop of 10,254 lots from a week earlier. Prices rose 0.7 percent in the period. Each contract represents 25 metric tons of the metal used in pipes and wiring.

A combination of lower open interest and higher prices usually signals short-covering, or buying of a commodity to reverse a wager on a decline, according to Macquarie Group Ltd.

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 Dec. 28. The figures were compiled by the bourse.

                 Change in           Price Change
               Open Interest             (%)

Aluminum            -9,258              -1.0
Copper             -10,254               0.7
Zinc                -6,252              -1.4
Lead                 1,475               1.3
Nickel              -1,251              -0.9
Tin                  1,308               0.4

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net