Analysts look for copper demand from China, the world's largest consumer, to remain strong in the months ahead, particularly due to ideas that the country may have to rebuild drawn-down inventories.

Some say this should support prices going forward, although others suggest this expectation may already be factored into historically high prices.

"We could see some stronger demand materialize from China," said Dave Rinehimer, director of futures research with Citigroup Global Markets.

Bill O'Neill, one of the principals with LOGIC Advisors, pointed out China's second-quarter gross-domestic-product growth of 11.3% suggests its economy remains robust, which in turn means copper demand.

"The way they're building and doing major projects, it's hard not to say that demand is going to go up," he said.

However, he cautioned, the key question is "what price discounts (strong) demand over the next couple of years?" In other words, he added, "is $3.60 or $4 copper over-discounting the demand levels?"

UBS base-metals strategist Robin Bhar, in a research report earlier this week, noted that Chinese net copper imports for the first seven months of 2006 were down 28% from a year ago.

Such statistics haven't been seen as bearish, however, with several analysts saying the country has simply worked down its inventories, thus meaning it will likely have to start re-stocking at some point.

"It's a little bit tricky (assessing Chinese demand) because China's imports for copper actually fell through July of this year," said Patricia Mohr, vice president with Scotiabank. "For the first seven months, it was down quite substantially."

But that doesn't mean there has been any dramatic decline in underlying demand, she continued.

"My guess is that China's inventories on hand of copper have actually been worked down and they will have to get back into the market place in the next six months and buy more copper."

Rinehimer offered a similar view.

"Their stocks have been drawn down and you could see some stronger import demand materialize," he said. "I think copper is more likely to go back to the $4 level than the $3 level."

Bhar said the apparent de-stocking in China appears to have occurred against a background of lower imports, higher domestic production and State Reserve Bureau, or SRB, sales. Traders and industry officials in China estimated late last week that the SRB had sold 100,000 metric tons of copper.

"We believe that inventories of metal have now reached very low levels and consumers will need to re-stock over coming months, which will help to underpin copper prices," said Bhar.

The SRB sales depressed prices in China relative to the London Metal Exchange, he said. Thus, the Shanghai Futures Exchange discount meant imports into China were "not viable."

However, Bhar concluded, a narrowing of the SFE discount "could be a first indication that SRB selling could be nearing an end allowing imports of refined metal to resume."