Copper consumption by the world's second-largest economy will continue to slow down in 2012 as construction of new homes in China declines, auto sales remain slow and railroad investments lag.

Analysts from Daiwa Capital Markets told Bloomberg News that China is approaching a "major" slowdown in its manufacturing activities, as attested by the performance of its official Purchasing Managers Index for October.

According to Beijing Antaike Information Development Co., refined copper consumption will grow 6.4 per cent to 7.85 million metric tonnes in 2012, a dismal pattern compared with the 8.5 per cent growth this year to 7.38 million tonnes.

"We expect the slowdown to accelerate in the coming months, unless policymakers loosen policy in a timely and decisive manner," said analysts from Daiwa Capital Markets.

The power sector will be the main driver of China's copper consumption growth next year, as tight credit and slower exports are expected to curb demand further, according to slides prepared for presentation by Yang at Antaike's annual copper conference.

"We reiterate our view that there is a 25 per cent chance of real GDP growth falling below 8.0 per cent year-on-year in 4Q11 or 1Q12," added analysts from Daiwa Capital Markets.

Still, analysts remain doubtful that China will loosen monetary policy at least until early 2012 since results of tightening measures have yet to be fully realised.

"A high-level policy debate is still needed before major policy changes could take place," Ken Peng, an analyst at BNP Paribas SA said in a report Tuesday. "Policies that the market is strongly hoping for, cutting RRR or interest rates, would unlikely come out until early next year at the earliest."

Peng said a new consensus for a policy turnaround may occur during the Central Economic Work Conference scheduled in December.

China's October PMI plunged to 50.4 from 51.2 in September, suggesting the country continued its gradual slowdown in response to government measures to cool growth and temper high inflation.

Daiwa analysts said the dismal October PMI exposes the already "pessimistic" view of the future by firms involved in China's manufacturing sector since not only inventories of raw materials were reduced but the workforce was also slashed.