LEADING mining company directors have expressed concern about the level of speculative investment that has fuelled the copper price’s bull run, as new industry research raised doubts about China’s appetite for the red metal.

The FTSE 100 directors, who asked not to be named, said that they questioned the sustainability of the high copper price — which remains about 80 per cent up on last year’s level despite having shed almost $2,000 (£1,100) a tonne over the past month.

Copper three-month futures fell 4 per cent to $6,740 a tonne yesterday after a report from the International Copper Study Group said that China’s copper consumption seemed to have fallen 6.4 per cent in the first quarter of this year.

China’s rapid economic development has been a key reason why the price of copper — and other metals — has soared to record highs. Any drop in Chinese consumption will have a big impact on the metal’s price.

Analysts expect this year to be the first in several that copper supply has outstripped global demand, although only by 12,000 tonnes, compared with 17.7 million of global consumption. Supply has been restrained after a near-decade of underinvestment but is starting to catch up.

Peter Kettle, an analyst at CRU, the commodities consultancy, said that he remained bullish on the fundamentals driving the copper price but conceded that speculators had driven the price too high. He said: “There is no science to say what the price would be if there was no speculative investment in there. The [copper] price is going to come down, but it’s just a question of how rapidly it occurs.”

Mr Kettle expects the price to settle at about $2,500 a tonne in five years’ time, in line with a gradual increase in supply.

BHP Billiton, Rio Tinto and Xstrata, which are investing heavily in their copper businesses, would not comment on their price expectation. Sources close to the miners played down fear of any fallout from a further drop in the copper price.