????"China accounts for over 40% of global copper demand and a substantial proportion of other base metals as well," says Peter Buchanan, a commodities analyst at CIBC World markets in Toronto. "In the next year or two I think there is probably more downside risk than upside."
????Buchanan notes that a fall in metals prices "would certainly help the earnings of a large number of companies directly." China is an important part of the equation, but so is what happens in the European economy, Buchanan says.
????Nikos Kavalis, a commodity analyst at Royal Bank of Scotland in London, says he believes the selloff in metals was more about speculators selling commodities rather than a fundamental issue of supply and demand.
????He says that manufacturers that use copper such as cable and wire makers were struggling to survive earlier in the year. 'Without a doubt, copper-intensive industries have it much better right now," Kavalis says.
????He warns, however, that he is expecting a rebound in copper prices in 2012 as the supply situation tightens. "We're expecting a soft landing in China," he says.
