Copper prices have been fairly resilient around $7,000/tonne in recent weeks, but upward progress is a struggle. They are slowly carving out an uptrend, however, so they are moving in the right direction relative to our forecasts, though they must step up a gear to reach the $7,266/tonne average we are expecting for Q3. With so much short covering potentially to be done, and possible catalysts in sight, this forecast is still achievable, with further price gains still expected for Q4. But the upside will be capped by bearish risks clouding the medium term outlook and lead to a sideways-to-lower trend in 2014, with the risks increasingly to the downside. Indeed, of all the metals, prices for copper are still highest relative to marginal production costs, so they have furthest to fall if bearish case scenarios take hold.
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