NEW YORK, May 25, 2012 (Dow Jones) -- Fund managers turned bearish on copper futures and options in the week ended May 22, according to weekly data released Friday by the Commodity Futures Trading Commission.

Managed funds shed 1,563 long positions, or bets on higher prices, and added 6,078 short positions, or bets on lower prices.

This turned the category's overall position net short by 2,808 contracts, from a net long of 4,833 contracts a week earlier.

Speculators "bet big against copper by reducing longs and increasing short positions last week--global demand concerns and speculation that [production] deficits may be much smaller than expected are growing," strategists at TD Securities said in a note. 
Copper's widespread applications in construction and manufacturing make its price a bellwether of global economic activity. Investors often look to copper as an indicator of economic health.

This is the first time speculative traders are net short copper since the week ended Jan. 10, and this is the biggest net short since the week ended Dec. 27.

The net position is the difference between the number of long and short contracts held by traders in the category, which includes hedge funds and managed funds. Changes in the net position are considered indicators of shifts in trader sentiment.