CTA liquidation returns to base metals amid commodity-wide derisking

Trend-following CTAs sold an estimated 280kt of base metals on June 23, led by Comex Copper (130kt), LME Copper (70.9kt), Lead (38.3kt), and Aluminum (33.8kt), extending the commodity-wide derisking already seen in energy markets.

CTA de-risking has extended beyond crude, refined products, and natural gas (see here). Following an initial wave of liquidation in early June (see here), systematic selling accelerated again on June 23, when Trend-following CTAs sold an estimated 280kt of base metals across major exchanges:

• Copper (COMEX): ~11,475 lots across three strategies (130kt)
• Copper (LME): ~2,834 lots across one strategy (70.9kt)
• Aluminum (LME): ~1,352 lots across one strategy (33.8kt) to the first net short since Sep 5, 2025 (-18%)
• Tin (LME): ~228 lots across three strategies (1.1kt)
• Lead (LME): ~1,533 lots across three strategies (38.3kt)
• Nickel (SHFE): ~5,800 lots across two strategies (5.8kt)

Zinc (SHFE) remains the notable exception, with Trend-following CTAs buying an estimated 4,560 lots on June 23.

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Fundamentally, the weakness reflects a combination of metal-specific and macro factors. Aluminum has come under pressure due to its exposure to a reopening in Strait of Hormuz flows (see here), while US tariff uncertainty continues to weigh on Comex Copper and its premium to LME. In nickel, persistent Indonesian supply growth remains a key headwind, limiting sustained upside.

Despite the broader commodity-wide derisking, CTAs continue to selectively add long exposure in a handful of markets, including livestock (see here), EU emissions (from 18% to 55% long since June 16), Cocoa (from 9% to 27% long since June 12), and Cotton #2 (from flat to 18% long since June 16).

Source (all charts): Kpler Financial Flows

This report draws on Kpler Financial Flows. The full dataset delivers daily and intraday CTA positioning, order stacks, and flow estimates - allowing you to track systematic moves as they develop, rather than after the fact. Request access to Kpler Financial Flows here.

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