After rocketing almost 7% on Friday, the spot copper price pulled back on Monday falling through the $3.30 a pound level.

By mid-morning in New York spot copper was changing hands at $3.29 a pound, down 0.5% on the day as traders, reassess Friday's surge on the back of good economic news and new talk of economic stimulus in Europe and China. Copper is down more than 11% compared to a year ago and last week hit 18-month lows of $3.06 a pound.

Bloomberg reports sanity returned to the market on Monday after a report from Morgan Stanley that forecast refined copper production will exceed demand through 2015.

The investment bank believes the market for the red metal is now "shifting from a long period of constrained mine supply to one in which new mine capacity growth brings about the long-awaited return of the refined market to moderate surpluses."

Copper has stayed at relatively lofty levels – a price above roughly $3.15 and most mines make a profit – thanks to largely static supply in global markets for a number of years and rising demand that now tops 20 million tonnes annually.

But a slew of new mines in Indonesia, Peru and Mongolia coming on stream and expansion at existing mines in number one producer Chile this year will result in a 6.4% jump in mine output the International Copper Study Group estimates.

Copper sentiment also deteriorated after data from the US Commodity Futures Trading Commission showed money managers increasing their net short positions after three weeks of reductions. This means traders expect prices to fall from current levels.