Compiled from Bloomberg, Forbes and Reuters news wires
China's State Reserves Bureau (SRB) sold 20,000 tons of copper in a public auction today. The bureau also announced it would sell an additional 20,000 tons of copper on Nov. 23. The action was taken in an attempt to bring down the high cost of copper, which has been rising sharply since 2003. The London Metal Exchange (LME) however, reported that copper futures on the overnight hit a record high at $4,174 a ton. The LME three-month copper was quoted at $4,130/$4,140 a ton by midday on Wednesday.
Copper futures for December delivery rose 0.8 cents, or 0.4%, to $1.9135 a pound on the Comex division of the New York Mercantile Exchange, the highest close ever.
According to Bloomberg news, there isn't enough metal in warehouses approved by futures exchanges to cover contracts. In addition, there has been much market speculation that the SRB is holding short positions (betting the price will drop) in Shanghai and on the London Metals Exchange, handled by a senior SRB trader, Liu Qibing who has been missing from the job. There is much talk about his whereabouts. The SRB told Reuters he was on leave.