Reuters reported that Barclays lowered its 2014 aluminum price forecast citing a larger global surplus resulting from higher Chinese domestic output. The investment bank cut its 2014 LME cash price forecast for aluminum to USD 1,838 per tonne from USD 2,100.

Barclays said that we expect a modest global market surplus to develop in second half of 2013, supported by a seasonal moderation in Northern Hemisphere demand set against capacity ramp ups in China bolstering production growth.

Barclays lowered its average LME cash price forecast for lead to USD 2,263 per tonne in 2014 down from its previous forecast of USD 2,450. The bank however expects an essentially balanced lead market for next year.

Barclays also downgraded its 2014 LME nickel price forecast to an average USD 14,000 per tonne from its prior outlook of USD 18,000 per tonne, citing persistent oversupply in the nickel market.

The potential downside for copper prices is bigger than any other metal. One of the main issues causing price volatility is the sharp slowdown in Chinese economic growth.

We are in the middle of a cycle of stronger copper mine supply driven by a combination of new projects, increased recoveries at established facilities and expansions.