News Wrap

IN THIS morning’s News Wrap: Steel demand up but coal price still struggling; and Twiggy’s big pay day.

Staff Reporter

Weak coal prices temper steel strength

DEMAND for coal has increased on the back of increased home construction in China. However, according to the Australian Financial Review, coal prices will not benefit from the boost.

Over supply continues to plague the market, with cost-cutting being the major focus of many coal producers who are failing to make profit at current spot-prices, such as Yancoal and BHP Billiton who both reported losses this week.

According to CLSA Asia Pacific Markets analysts, Chinese property construction will be the key driver of commodity and steel demand in the third quarter.

“Coal demand also improved and stocks fell but due to high imports and miners’ aggressive destocking activities, coal prices continued to slide,” CLSA said.

Twiggy’s pile grows

MINING magnate Andrew ''Twiggy'' Forrest will be paid a dividend of more than $A102 million after his flagship company exceeded expectations for both profit and dividend flows in the 2013 financial year, according to the Sydney Morning Herald.

Fortescue Metals Group's net profit of $US1.74 billion ($A1.93 billion) let the iron ore miner pay out a A10c fully franked dividend to its shareholders.

That dividend was more than double the 4c dividend Credit Suisse was expecting. It also ensures a lucrative pay day for Fortescue founder Forrest, who remains its chairman and biggest shareholder with almost 33%of the company.