Copper prices hit a new record high as investors gambled that China may be forced to cover a big, loss-making position worth as much as $200 million.
Three-month copper futures touched a record $4,185 a tonne in London as traders blamed the volatile conditions on China.
China's State Reserves Bureau (SRB) is the focus of market speculation that a trader working on its behalf had taken out a huge 150,000 to 200,000 tonne bet that copper prices would fall - at a time when it has been climbing to record highs.
Despite repeated public comments by the normally secretive SRB that it will intervene by selling up to 500,000 tonnes of its 1.3 million tonne copper stockpile to cool prices, prices have hit record levels as investors call the agency's bluff.
Yesterday traders said China, the world's biggest copper importer, was seeking through the SRB to export up to 200,000 tonnes of copper, or more than three times the stocks in LME warehouses worldwide.
China has said any position, if it does exist, was taken privately by a trader and is not held by a Chinese government agency.
Traders said it was logistically unlikely that such a quantity could be shipped from China to the LME's Asian stores in time to deliver against any short positions in December.