Speculation this week has focused on the overall pace of China’s GDP growth, but the greater downside risk to the prices of industrial metals over the medium term is the prospect of a decline in the commodity intensity of economic activity as the investment boom comes to end. This is a key factor behind our forecast that the copper price will fall to $5,000 per tonne over the next two years, well below current levels of around $8,400 and less than half the highs seen in early 2011.
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