With the scandal surrounding Chinese shadow lending earlier this year and a flurry of mergers and acquisitions (M&A) this summer, the copper space has certainly seen some excitement this year. But now that calls for a surplus have been replaced with cries for a shortage, it can be difficult for investors to figure out what's really going on with the red metal. To get a little more insight into the copper market, Copper Investing News (CIN) caught up with with Stefan Ioannou, mining analyst at Haywood Securities. In the interview below, Ioannou breaks down the effects of Chinese shadow lending, talks about what the current state of the market means for mining companies and gives his outlook for copper prices. Overall, Ioannou sees copper sitting around $3.25 for the rest of the year, with a deficit pushing prices higher later in 2016 and into 2017. CIN: In your view, how have copper prices performed so far this year? Were there any surprises for you?SI: Year-to-date, the copper price has been in line with what we've been expecting. The average is $3.15, and it's about $3.20 right now, so no major surprises. I think the one thing that caught everyone a little off guard was the impact of Chinese shadow lending. It caused some volatility, especially early in the year when we saw copper drop below $3. It has since recovered, but that did cause a lot of uncertainty. CIN: With that in mind, could you give our readers a bit of an overview of what happened in terms of Chinese shadow lending?SI: Essentially what happened was that the Chinese were buying copper and keeping it in non-bonded warehouses, then using it as collateral to get low-cost loans to slip into higher-yielding investment vehicles. However, it became pretty apparent that there was some fraudulent activity going on — basically these guys were using the same block of physical copper as collateral on multiple loans. A big concern was that with the fraudulent activity and the government tightening down on the whole situation, we were going to see those Chinese investors look for other means or other forms of collateral to do their financings with. That meant that all that copper in these non-bonded warehouses was potentially going to hit the market and flood it, at least for the short term.