May 14 (Bloomberg) -- Cap SA, Chile’s largest iron miner and steel producer, fell to a three-year low on concern that prices will fall for iron, the source of 90 percent of gross profit.
Cap fell 0.6 percent to 14,040 pesos at the close in Santiago, the lowest price on a closing basis since Dec. 10, 2009. The shares have fallen for four straight days, for a cumulative drop of 6.8 percent.
The price of iron ore in the Chinese port of Tianjin fell 1 percent today to $128.1 per metric ton, and is down 12 percent this year. Ore prices may trade between $110 and $120 a ton this year as supplies expand by about 70 million tons, led by output expansions in Australia, according to CLSA Ltd.
The shares have been dropping on “expectations that iron prices will continue to dive,” Felipe Ruiz, an analyst at Banco de Credito & Inversiones, said in a telephone interview today. “There is an overreaction at the moment in the market, and this could be a good opportunity to buy.”
Cap shares have tumbled 13 percent this year, compared with a 0.3 percent drop in Chile’s benchmark Ipsa index.
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