Hopes of a rebound in demand in the second half of the year are keeping copper prices above $8,000 per tonne despite the huge overhang of inventories in China and the continuing economic and financial crisis in Europe. This position is unsustainable. We continue to expect the price of copper to fall back to $6,000 per tonne by the end of 2012 and $5,000 in 2013, undermined by disappointing global growth, sector-specific weakness in China, recovering supply, and a renewed surge in risk aversion as fears over the future of the euro come to a head.
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