"Most of us don't know the full details or the size of any Chinese positions or if the positions exist at all," said Jeremy Goldwyn, head of industrial commodities at Sucden, a London commodities broker that has no business relationship with the State Reserve Bureau. "The only people who know for sure are the brokers involved," he said.
The brokers who executed Liu's trades and who may be stuck with his losses if the Chinese government refuses to pay or deliver copper to cover them, if they exist, have been silent. Several participants in the market say the Standard Bank of South Africa and Sempra Energy, based in San Diego, hold at least some of the contracts. Spokeswomen from Standard and Sempra declined to comment on the issue.
Obtaining reliable information in the market, particularly about closely guarded end users like the Chinese, is impossible, participants say.
"You can only speculate on what's been published and whether it's true or not," added one London metals broker, who spoke on the condition of anonymity because he is not authorized to comment to the news media.
terrified
Other copper end-users, the manufacturers who actually need the physical product and are generally active in the futures market, are terrified to trade at all, the broker said, because they have no idea whether the market will plummet or continue its ascent.
In a sign of the market's hair-trigger jumpiness, prices dropped US$90 in five minutes on Wednesday, traders said, after Reuters, citing a bureau official, said the bureau was moving to export 200,000 tonnes of copper.
After the decline, some traders quickly decided the Chinese government was spreading that information to drive prices down, perhaps to cover Liu's short position, and drove it up instead by the close of the market.
"If you were going to export that much, why would you let the market know?" the broker said.
Whatever happens to Liu, analysts expect the market to be bumpy toward the end of the year.
Copper and other commodities, once niche investments, have become more mainstream in recent years, attracting money from pension and mutual funds. If China is vulnerable to losses, it may provide a painful reminder that commodities were niche investments for a reason -- they can be much more risky and volatile than stocks.
"There is a potential for larger declines in commodity markets than on a normal stock exchange," said Neil Buxton, an analyst with GFMS Metals Consulting in London.
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