Ｓｈａｎｇｈａｉ Ｃｏｐｐｅｒ Ｄｅａｌｅｒｓ Ｔｉｐｐｅｄ ｔｏ Ｐｌａｙ Ｉｔ Ｃｏｏｌ

Shanghai's copper exchange is expected to

react calmly to reportsthat China State Reserves Bu-reau (SRB) plans to export 200， 000 tonnes of copperfrom its stockpile soon todampen prices. The SRB isrunning out of time. On De-cember 21， it will have to de-liver or buy 130，000 tonnesof copper on the open marketbecause of futures contractssigned in July and August byits trader Liu Qibing at about US$3，200 a tonne. Three-month copper on the LondonMetal Exchange (LME)reached a record US$4，220 atonne. At current prices， it willhave to spend about US$830million. When the website ofChina Minmetals publishedthe news of the 200，000-tonneexport， the Shanghai marketbarely moved. The most activefuture rose to RMB37， 430 orUS$4， 620， slightly higherthan the week's closing priceof US$4，220 on the LondonMetal Exchange.

A British delegate to the Second Chinese Copper Con-ference that opens in Shang-hai today said that copperprices were already at almostrecord levels before the newsof Mr Liu's trades broke.\"Since then， prices have notrocketed or blipped. The mar-ket is resilient.\" According tothe Economic Observer newspaper， Mr Liu was ques-tioned in mid-October for trad-ing illegally for his ownaccount， under the shuang guiregulation， under which a per-son must make himself avail-able for official investigationat any time. The report couldnot be confirmed.

China's latest debacle inthe market will be a focus ofattention at the two-dayconference， to be attended bytop executives fromMinmetals， the LME， Austra-lia Metal Exchange， Barclays Capital， Sucden and otherleading commodities firms.

SRB will conduct its sec-ond auction， of 20，000 tonnesof copper. In Beijing， a simi-lar auction fetched a price ofRMB37， 850 to RMB38， 750a tonne， slightly higher than in-ternational prices.

For the SRB， this is one ofmany wars which China isfighting over the global pricesof major commodities， includ-ing crude oil， cotton， zinc， ironore， aluminum， rubber andcopper， for which it is the big-gest or one of the biggestimporter.

It blames internationalfunds - popularly known hereas \"big crocodiles\"-for specu-lating in these commoditiesand using Chinese demand asthe excuse to buy and sell，even when it is only one ofmany factors influencing themarket.

With a war chest of 1.3million tonnes of copper in itswarehouses and national for-eign exchange reserves of US$769 billion， China is con-fident of taking on the hedgeand investment funds and biginvestment banks. Foreignanalysts prefer to back the \"bigcrocodiles\"， saying that muchof the USS 100 billion in com-modities funds is going intocopper and that China lacksthe capital or market guile tobeat the hedge funds.