Breaking News

U.S. Said to Limit Visitors From Ebola Nations to Five Airports
Tweet TWEET

Chile’s Cap Falls as IM Trust Says Iron Prices to Drop

Cap SA (CAP), Chile’s largest iron-ore miner, fell after the brokerage firm IM Trust SA cut its rating on the stock and said average prices for the metal this year may be 20 percent lower than estimated in March.

Shares dropped 0.6 percent to 17,390 pesos at 3:31 p.m. in Santiago trading. The stock slid 1.4 percent last week, the biggest decline since Dec. 7. Cap reached a four-month closing high of 17,885 pesos on Jan. 10.

“Price estimates for the medium term have fallen and thus we should not expect Cap’s stock price to reach new highs unless expectations start to improve,” Jose Manuel Edwards, an IM Trust analyst, wrote today in a report.

The company may also face higher energy costs after the termination of an energy contract due in 2015 with Santiago- based Empresa Nacional de Electricidad SA, known as Endesa, he wrote.

He cut his rating on Santiago-based Cap to the equivalent of sell from hold. Iron-ore prices may average $123 a ton this year, 20 percent lower than when IM Trust published its last revision in March, according to the report. Prices in 2014 may average $118 a ton, 13 percent below the prior estimate, he wrote.

To contact the reporter on this story: Danielle Verbrigghe in New York at dverbrigghe@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.