"The aluminum tycoon" is back, this time betting on copper!

Sonny McNess, a veteran metals trader who once shook the London Metal Exchange (LME) with massive bets on the aluminum market, has now returned with large positions—this time targeting copper.

According to a Bloomberg report on October 21, sources revealed that McNess, currently Chief Metals Derivatives Trader at Hartree Partners LP, has recently bought large amounts of LME October copper contracts while simultaneously shorting November futures, betting that a short-term supply squeeze will push the premium of near-term contracts higher. Insiders say Hartree's position is the largest among several sizable October delivery contracts recently. The core logic is: if Trump announces tariffs on refined copper, a short-term supply squeeze will almost be inevitable, resulting in direct profits for related positions.

This bet has already caused a stir in the market. Before the October contract's expiration, the price difference between October and November swung violently, with the October contract once trading at a premium of $91.99 per ton over November, reflecting a typical spot market backwardation during supply squeezes. Meanwhile, this trade coincided with LME Week, the industry’s annual event in London, where large positions and extreme volatility have become a center of heated discussion among participants.

Tariff Expectations Drive Copper Market Dynamics

Whether Trump will impose tariffs on copper is currently the key uncertainty in the copper market.

Bloomberg reported that since May this year, copper stocks in LME’s global warehousing network have dropped sharply—as traders moved large volumes of copper to the U.S. in advance to hedge against potential import tariff risks. Meanwhile, a rebound in Chinese import demand has further tightened copper supply.

The continued drawdown in inventories has repeatedly pushed prices into backwardation. In August of this year, the spot copper price was once $545 per ton higher than the three-month futures, marking one of the largest supply squeezes in LME history.

Currently, a large amount of LME metal stockpiles are concentrated in its U.S. warehouses. If tariffs are implemented, traders could profit by buying near-month LME contracts, withdrawing metal from the exchange, and delivering to New York futures contracts. However, the Trump administration has yet to make a clear statement, leading some traders to worry: if the tariffs ultimately do not go through, copper prices might face significant downside risk.

About McNess: The "Large Position Regular" on LME

Sonny McNess is well-known in the metals trading circle for his bold position sizing, with his past large bets having repeatedly shaken the LME—forcing the exchange to revise its rules at times.

He previously worked at JPMorgan and Mercuria Energy Group, mainly focusing on the aluminum market. Earlier this year, he left Mercuria and later joined Hartree Partners as Chief Metals Derivatives Trader.

Last year, while at Mercuria, McNess built a massive position in the aluminum market, directly leading the LME to introduce the so-called "front-month lending rules"—a regulation requiring traders whose positions exceed LME warehouse spot inventories to lend the excess at zero cost, preventing large positions from having undue market impact.

It is noteworthy that Hartree is not the only player in this copper market battle. LME data shows there are two other somewhat smaller long positions in the October contract, as well as an unidentified trader holding a large long position in the November delivery contract. The stage for large-position competition in copper is quietly taking shape.

According to reports, faced with market attention, LME stated it has mechanisms in place to address potential risks of price distortion from large positions.

An LME spokesperson said in a statement: "LME has several arrangements in place to guard against undue market impact from large or dominant positions, including front-month lending rules, daily position reporting, and accountability levels."

The spokesperson added: "LME also periodically requires market participants to provide further position management information and reserves the right to require relevant position holders to undertake appropriate management actions."