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Speaking at the Mining Indaba on Monday, De Wet noted that within China, the health of the construction sector will be the main risk to copper demand.

He noted that demand for copper is unlikely to be strong enough to support prices above US$9,000/mt for most of the year. Copper is a base metal of choice for most investors and speculators and its price generally offers great insights into how traders view the global economic outlook.

China will still remain the most important factor as far as global demand for copper in 2012 is concerned. He said China's demand, which has been growing on average by 15.1% per year since 2000, was expected to increase by 6.6% in 2012.

Although China is the key driver of global copper consumption, De Wet said he expected the US and Europe to also remain important centres of copper demand.

Using sensitivities of copper demand to industrial production to determine the potential impact on copper demand, he said he expected the European need for refined copper to decline from 4,008K mt in 2011 to 3,827K mt in 2012. For the US, a decline in demand from 2,490K mt in 2011 to 2,440K mt this year is expected.

"China should once again account for the majority of copper refined consumption growth in 2012. Understanding Chinese copper demand and potential weaknesses are crucial in understanding copper," he said.

He noted that construction accounts for around 55% of China's total copper demand, domestic consumption around 29% and exports adding about 16% to total demand. He said the impact of a Chinese slowdown in construction would be the decisive factor, with domestic consumption needed to fill the gap.

"Although exports are perceived to be a risk to Chinese copper consumption, this sector constitutes only a modest percentage of total Chinese copper demand. We believe the real risk to copper demand remains within the construction sector," he said.

"After stabilising over the second half of 2010 and into the first half of 2011, Chinese property sales growth started to deteriorate in September 2011. We expect sales growth to decline further during the first half of 2012. We note that most of the growth in construction has come from the private sector, with government-related property development making up only a small percentage of total developments," he said.