Rio Tinto's chief economist, Vivek Tulpule, believes world prices for such commodities as copper and aluminum haven't yet reached their cyclical peaks. “I think with copper prices and aluminum prices it is entirely possible that we have not seen the top,” he said in a recent Dow Jones News Service report in mid-April when May copper cathode futures were $4/lb and aluminum futures were $1.40/lb.

Wachovia Securities senior economist Gary Thayer believes there are numerous signs evident that the U.S. economy probably is in a recession. And any such U.S. slowdown would have some impact on commodity prices, but this would be muted by the rise in demand from China,

Tulpule told Dow Jones: “There will be impacts and they will be complex, but when people just try to drive the macro bulldozer over this I think they ignore that commodities and the U.S. economy are no longer linked in the way they were five years ago.”

Rapid urbanization in China is seeing 15 million people a year move to the cities, which is driving unprecedented construction activity and demand for commodities—and reducing the importance of U.S demand trends on global aluminum and copper supply and pricing.

Rio Tinto analysis has found a 2.5% drop in gross domestic product in the U.S. would lead to a 6% drop in U.S. imports, which in turn would cut Chinese exports by about 2% or $20 billion, equivalent to only about 0.7% of GDP. The economist for the Australian mining firm expects China to post GDP growth of about 10% in 2008 and about 9% on average in coming years.

Tulpule told Dow Jones there is no sign that Chinese commercial or financial entities have had any exposure to the U.S. subprime crisis and are feeling little effect from the impact on credit markets. “Chinese banks won't be directly affected, and Chinese borrowers don't need the international lending system because they have got more than enough money of their own,” he says.

Tulpule expects that annual Chinese growth in copper demand of 4% can be sustained for decades, while on the supply side the response is being crimped by delays in the expansions of mines, electricity shortages and limited supplies.