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Marex Spectron's LME positions report targets data gap

Keywords: Tags  Marex Spectron, London Metal Exchange, LME, base metal prices, Guy Wolf, Vicky Sanders, Mark Burton

LONDON — Marex Spectron has launched a weekly report on speculative positions in London Metal Exchange base metals contracts to fill a data gap in the metals market.

Using a proprietary algorithm based on publicly available LME data, London-based Marex Spectron will now provide a weekly estimate of speculative positioning in base metals contracts, building on the position analysis it already provides to clients.

"The ability to have an accurate assessment of what speculators are doing on a regular basis is an important part of any risk management process," Guy Wolf, the company’s global head of market analytics, said Feb. 11. "This fills an important information gap on the exchange," Wolf said.

Speculative positioning was longest in zinc contracts at the end of last week, with net longs accounting for about 20 percent of open interest, data in Marex Spectron’s inaugural report show.

Aluminum had the shortest position, with shorts accounting for about 5 percent of open interest. Positioning in all other metals was marginally long, the data showed.

Marex Spectron has been a longstanding critic of commitments of traders reports tracking speculative and physical positions in U.S. exchange-traded metals. In October, head of analytics Vicky Sanders labeled such reports as "not fit for purpose," responding to a possible move by the LME to make such data publicly available.

"For us, it has been important to isolate and quantify the forces that act on markets, whether through the same technological infrastructure as high-frequency trading firms, or by quantitative models, which neutralize the impact of passive long index money," Sanders wrote at the time in a guest piece for AMM sister publication Metal Bulletin.

A version of this article was first published in AMM sister publication Metal Bulletin.

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