US copper futures rose again to a new series of record-breaking levels on Friday, and closed near or at their peaks, as speculators bought strong supply/demand fundamentals and rumours swirled that a huge short position may be held by a Chinese trader, brokers said.
In New York, copper prices on the Comex division of the New York Mercantile Exchange followed LME copper prices in setting a series of new record levels.
The market was buzzing with the China talk regarding an impending short position taken out on the London Metal Exchange that could mean losses of up to $200 million.
"What's driving this thing higher? It has a lot to do with the Chinese. People at this point are, 'We'll believe it when we see it,' as far as what positions they (China's State Reserve Bank) have and what they are going to do," a trader said.
"Some people are probably very vulnerable right now if they've been dealing with the Chinese, especially if they are threatening to renege. That's not good.
It's not even good for the Chinese," he added. Benchmark December futures soared to a new contract high at $1.98 a lb. and closed at $1.9780 a lb. up 3.20 cents.
Spot November charged up 5.40 cents to end at $2.10 a lb., a record peak, breaking the day-all-time high. Comex copper pegged final volume at 23,000 lots similar to 23,090 lots traded on Thursday.
Widespread talk that a trader working on behalf of China's State Reserve Bureau (SRB) had taken out a huge 150,000-to 200,000-tonne bet that copper prices would fall prompted speculative buying to try to profit from a short-squeeze if the alleged position is confirmed in December.
Instead of falling, copper prices have been breaking their own records almost daily and at times hourly. Some players said they think copper will continue rising.
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