Aluminium used to be something that made aeroplanes and drinks cans. Now it is a financial instrument.

Between 75 and 90 per cent of the world’s physical aluminium stocks are tied up in financial arbitrage deals exploiting the difference between the spot and forward price, according to several industry insiders. In November Klaus Kleinfeld, chief executive of Alcoa, described the stocks tied up in financial deals as “almost all”.

Goldman Sachs (GS) has filed for approval with the Securities and Exchange Commission to launch a line of exchange-traded funds, seeking to become the latest financial giant to into the industry. According to the 40-APP filing, Goldman’s initial fund will “offer an extensive representation of the Brazilian, Indian, Chinese and Korean markets by targeting all companies with a market capitalization within the top 85% of their investable equity universe.” Goldman estimates that the fund would consist of approximately 300 to 450 constituents.

The filing requests relief to launch a variety of funds, including equity, fixed income, and blended portfolios, but details only traditional passively-indexed ETFs, a mild surprise given Goldman’s expertise in the field of active management.

The CFTC offers a weekly net commitment report of non-commercial and commercial traders of copper futures amongst other markets.

The commercials are predominated by industrial users who will typically be long the futures and producers who will look to be tactically short to hedge price downside risks. As such for the commercials to be net short overall the large copper producers need to be sufficiently short so as to overwhelm the long bias of the industrial users and typically they are only going to do this when they see the copper price as excessive.