http://www.purchasing.com/article/CA6285763.html

If only I had bought shares in Antofagasta….

From the page: “The copper price has nearly tripled from the end of year 2001 but not because of historically low inventories and strong world demand as much as by The Case of the Missing Trader. In fact, speculation that China will refuse to deliver up to 200,000 metric tons of copper from its reserves to cover a massive gamble on futures contracts is driving prices to record highs.

As reported in the Financial Times of London, last week’s activities on the London Metal Exchange began with the kind of story that could have come out of a spy novel Chinese copper trader had reportedly gone missing after building a huge short position of the red metal. The story continued to dominate trading during the week, even if there was little clarity on its truth. It was enough to push three-month copper contracts to all-time highs. Three-month copper contracts in London on Friday broke through a psychologically important level of $4,200, touching $4,244.50 a metric ton ($1.925/lb) in afternoon trading after a week of strong speculative demand. Later in the day, it eased to $4,198/metric ton ($1.90/lb). The price rally was triggered by rumors around China’s State Reserve Bureau (SRB), a government body that manages China’s strategic commodity reserves. Liu Qibing, a futures trader based in Shanghai, who may or may not have ties to the State Reserve Bureau, is said to have built a short position of 100,000 to 200,000 metric tons of copper. He amassed these futures contracts on the LME, betting that prices would go down. Instead, prices have continued to climb sharply this year on strong demand from China’s booming economy and some unexpected supply shortfalls from major producers in Chile and the U.S. If prices remain at their current levels or continue to rise, Liu’s trades could lead to losses of $200 million or more, according to a report in the International Herald Tribune.”