London Metal Exchange (LME) copper prices traded at new record highs in floor business on Tuesday, reaching $4,174 a tonne before ending at $4,137, up $12 on the kerb close the day before.
The market for three months delivery pushed higher on fund buying, the main driver behind a price surge that has extended so far this year beyond 30 percent.
"Initially it was chart-based buying that triggered further investment beyond $4,130, while $4,200 remains a reasonable target in the near term," a dealer said.
"There was also some delta-hedge buying and it should be noted that there was also a reasonable volume of trade buying, some of it in forward dates."
The focus persisted on reports of a big short position, possibly held by China, that might have a major impact on market direction.
Analysts said the market had been boosted by players hoping to cash in on a resolution to a possible short position - effectively a bet the market will fall - that industry talk put at potentially 150,000-200,000 tonnes.
LCH.Clearnet, which clears trades for the LME, said it did not comment on rumour and speculation but added: "LCH.Clearnet has no legal relationship or direct exposure to non-clearing members or to other clients of members.
"Clearing members must meet all their proprietary and client-linked responsibilities to LCH.Clearnet, which would take no action unless client failure forces a member or members to fail to perform to LCH.Clearnet.
"Members have banking facilities to effect payments to LCH.Clearnet. In the event of delivery failures, obligations can either be rolled forward, metal can be borrowed, or in extremes a cash settlement be made."
The SRB said recently it had more than a million tonnes of copper stored and has publicly advertised metal auctions for sale to its domestic market in a country that consumes about a fifth of the world's output.
"Even though the SRB claims it has as much as 1.3 million tonnes of copper, we believe it has limited abilities to stabilise the market and copper prices can be expected to remain strong," Barclays Capital said in a research note.
"Estimated to consume some 3.7 million tonnes of copper this year, China still has a large supply gap to fill, and it will remain a large importer of copper-in-concentrates, having produced less than 600,000 at domestic mines so far this year."
Aluminium dropped sharply by the kerb close on persistent producer selling, dealers said.
The price closed at $2,006, down $45, while nickel ended at $11,875, up $5.
Zinc was at $1,615, up $17 and just a dollar off an earlier eight-year high on fund buying.
Lead was at $968, down $7, while tin met solid support at $6,100 despite a hefty stocks rise on Tuesday, dealers said. It closed at $6,250, up $40.