Copper Falls as Citi Says Too Much, Too Soon; Antofagasta Slumps

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  • Antofagasta drops 11% after scrapping dividend as profit sags
  • Citigroup says it's bearish copper, zinc after overdone rally

Copper and other industrial metals fell as Citigroup Inc. said prices had advanced too much, too soon. Antofagasta Plc, a producer of the metal, slumped as much as 11 percent after canning its dividend.

Copper futures for May delivery declined 0.3 percent to settle at $2.2335 a pound at 1:17 p.m. on the Comex in New York, reducing the metal’s gain this year to 4.6 percent. On the London Metal Exchange, zinc slipped 2.4 percent to $1,742 an ounce.

“We see little that suggests the cross-industrial commodity rally is sustainable in the short term,” Citigroup said in a note to investors Tuesday. Copper and zinc may lead a retreat in industrial commodities, analyst David Wilson wrote. Prices will moderate into the second quarter, he said.

Commodities prices from metals to petrochemicals have fluctuated in recent weeks as investors weigh China’s slowing economic growth against the possibility of policy stimulus by the central government to revive investment and output.

China is poised to grow at its slowest pace in decades as it seeks to reform a bloated industrial complex. Looser monetary policy, along with an expanded fiscal deficit pledged by Premier Li Keqiang’s cabinet, are expected to help the leadership’s 2016 objective of growing at 6.5 percent to 7 percent.

  • Antofagasta fell as the copper producer scrapped its dividend following a rout in metals prices that wiped out almost all of its profit last year.
  • A Bloomberg Intelligence gauge of 18 large global base metal producers dropped 5.1 percent. Anglo American Plc led declines in the gauge, tumbling 11 percent. BHP Billiton Ltd., Rio Tinto Group and Glencore Plc also fell.
  • Among other metals, aluminum, lead, nickel and tin fell while copper rose on the LME.