Short interest ticks up in S&P 500 Materials sector; Albemarle tops the list

[Factory worker working with dangerous materials]
Milos Dimic

Short interest in materials stocks inched higher in July compared to late June, with Albemarle (ALB [https://seekingalpha.com/symbol/ALB]) emerging as the sector’s most shorted stock. The increase comes amid heightened geopolitical tensions, which continue to drive market volatility and reshape global trade dynamics.

Average short interest across materials stocks in the S&P 500 index rose to 2.92% of shares floating at the end of July from 2.85% a month ago.

The S&P 500 Materials sector (NYSEARCA:XLB [https://seekingalpha.com/symbol/XLB]) has gained 7% year-to-date, underperforming the broader S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]), which is up about 10%.

STOCKS WITH THE LARGEST AND LEAST SHORT POSITIONS

Ranked by short interest as a percentage of shares float

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SEEKING ALPHA

Lithium producer Albemarle (ALB [https://seekingalpha.com/symbol/ALB]) continues to be the most shorted stock in the materials sector, with 14.91 million shares sold short as of July 31—representing 12.67% of its float, down slightly from 14.79% at the end of June.

Albemarle aims for positive free cash flow in 2025 as cost actions strengthen financial flexibility. The company’s COO, Netha Johnson, will be succeeded by Mark Mummert, among various changes to the organizational structure, it said will "further align the company for agility and efficiency."

International Paper (IP [https://seekingalpha.com/symbol/IP]) was the second most shorted materials stock at 8.63% of the shares float. The pulp and paper company slumped after falling short of profit estimates with its second-quarter earnings report.

Meanwhile, short interests against CF Industries Holdings (CF [https://seekingalpha.com/symbol/CF]) climbed up and stood at 5.29% from 4.95% a month earlier.

Barclays analyst Benjamin Theurer on Wednesday upgraded CF Industries (NYSE:CF) to Overweight from Equal Weight and cited favourable market fundamentals, the start-up of low-carbon ammonia production, and continued share buybacks as key drivers.

Agricultural sciences company Corteva (CTVA [https://seekingalpha.com/symbol/CTVA]), on the other hand, took the spot for the least shorted stock in the pack and was preceded by Ecolab (ECL [https://seekingalpha.com/symbol/ECL]) and DuPont (DD [https://seekingalpha.com/symbol/DD]).

According to one Seeking Alpha author [https://seekingalpha.com/article/4799939-corteva-q2-preview-potential-benefit-from-positive-biofuel-policy-in-brazil], despite pricing headwinds and manageable tariff risks, CTVA’s share repurchase plan and operational improvements underpin a positive outlook for the stock.

INDUSTRY ANALYSIS:

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Seeking Alpha

SEEKING ALPHA

Containers and packaging remain the most shorted industry in the sector, with short interest at 3.79% as of the end of July, up from 3.67% a month earlier.

Construction materials took the second spot, with short interest easing to 3.07% at the end of July, from 2.72% the previous month.

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