A mystery buyer apparently is holding more than half of the copper stocks at the London Metal Exchange's warehouses, the latest disclosure of how a single trader can roil an entire commodities market.

That trader, whom the exchange hasn't identified, owns between 50% and 80% of the 355,750 metric tons held in LME-listed warehouses. This amounts to more than 177,875 metric tons of copper, valued at about $1.5 billion. The exchange first disclosed the large position on Nov. 23 in its daily inventory holder report.

'It's an awful lot of copper; it's an awful lot to finance,' said Charles Swindon, managing director of RJH Trading Ltd., a London metals-trading house. The trader's holding accounts for about 1% of all the copper the world will consume this year.

It is unclear when the trader started building the position, but market participants have noted some odd market trends that might be linked to the buying.

Speculation on the identity of the trader runs from some soon-to-launch exchange-traded funds to an options trader obligated to deliver a large amount of the metal.

It is unusual in the copper market for one trader to hold such a big supply in exchange warehouses around the world. Copper producers and consumers typically trade the metal through bilateral contracts, leaving the exchange-listed metal the 'last resort' for those who want to fill orders tied to contracts.

The LME has certain rules to discourage anyone from holding a dominant position, including forcing the trader to lend the copper to the market and limiting the fees the trader can charge.

The LME is enforcing its lending guidelines, said Stephen White, an exchange spokesman.

However, there is some evidence that the large position is raising the cost of the metal. Prices rebounded in recent days despite a stronger U.S. dollar. December copper futures ended Wednesday 3.2% higher, at $3.9460 a pound, on the Comex division of the New York Mercantile Exchange.

Meanwhile, the copper market has moved into a unique situation called 'backwardation.' Usually, it costs less to buy any commodity for immediate delivery than it does to buy a contract that comes due in future months, with the difference reflecting the seller's interim storage costs. But Tuesday, copper to be delivered in December traded at an $89-a-metric-ton premium to metal for delivery three months out, more than double last week's spread.

Analysts are perplexed as to what the trader would gain from holding that much copper. On top of the charges of storage, insurance and interest for any borrowed capital, the value of the copper would fall $89 over three months because of backwardation.

Copper traders have been bracing for a metal supply squeeze since October, when three separate companies announced plans for physical-copper exchange-traded funds. These funds would let investors trade shares listed on a stock exchange and are backed by metal up to LME specifications.

J.P. Morgan Chase & Co.'s Physical Copper Trust will launch with 61,800 metric tons, while BlackRock Inc.'s iShares Copper Trust will hold 121,200 metric tons. ETF Securities is also starting a fund, but hasn't specified how much copper it will hold.

J.P. Morgan and BlackRock declined to comment. ETF Securities couldn't be reached to comment.