China's State Reserves Bureau may be preparing to export around 30,000 tonnes of copper before end of November, traders said on Monday, to partially meet rumoured short positions.
"A shipment of about 30,000 tonnes should be leaving before the month-end," said a source close to China's State Regulation Centre of Supplies Reserve, which is seen as the front for the State Reserves Bureau on copper trades.
The bureau is at the centre of speculation that a trader, who is on staff for the centre, made bets on copper heading lower and built positions of between 150,000 and 200,000 tonnes.
But with world copper prices rising to successive highs and touching a record $4,243 a tonne on Friday, market traders said the positions might have exposed the bureau to losses of up to $200 million.
Traders said the bureau could have logistics problems in shipping the copper but official sources said there does seem to be some unusual large amounts of copper on the move.
"A lot of copper is coming here," said a merchant in Ningbo city, home of China's largest port.
Traders said the bureau was already storing more than 50,000 tonnes of copper in its warehouse in the eastern port city, out of which about 30,000 tonnes would be exported.
The short positions are believed to have been placed by Liu Qibing, who has not been seen by his business counterparts since early October.
Officials for the centre and the bureau have said the short positions were made on Liu's own authority, adding fears on the market that the bureau might not back the commitments, leaving Liu's brokers facing huge losses.
But some industry officials and traders said the bureau could partly meet its commitments - for about 50,000 tonnes of copper.
The centre has already shipped about 20,000 tonnes of copper to a LME warehouse in Asia, they added. Both the centre and the bureau are under the National Development and Reform Commission, the country's planner.
The commission classified the remaining short positions a private move, but indicated that it might help solve the problem, the traders and industry officials said.