I am fearful as hell, but not about China-I bought a house betting against the players who predict a reversion to historical norms for copper. What scares me is that commercial credit sucks-the small miners are selling themselves to get the cash they need to stay afloat. Its a shame. I would say that this might be time to look at these small players(on the contrarian theory).
I hate to sound like a broken record, but I really don't see China's consumption moderating in the neart term. Neither do I see any near term supply boosts(although I haven't really researched this latter point).
Not soon. Although copper is still 400% higher than it was 8 years ago, rising from about 70 cents to near $4.00, it is most probable copper will drop back to around $1.25 due to the massive slowdown in construction where 75 percent of copper is used in USA.
Due to manufacturing slowdown resulting from consumers close to freeze on spending and high oil prices, it is most likely China copper requirements will enable them to rely primarily on there own domestic production and pay minimal prices for external copper sources.
When copper was 70 cents, PCU was about $5/share.
When copper is $1.25, PCU should be about $10/share.
Those who think China can continue its growth without USA and EU consumer spending are dilusional to the point of virtual unreality.
In fact, I expect, based on more years investing than most, that all basic materials will start to flounder and plummet as the ripple effect takes its course over the next several years with no real recovery before 2 years out at the earliest with full recovery not until 2010.