As Chinese derivative markets were closed on Monday but iron ore spot and Singapore derivatives did trade with a small bounce after posting major slide on Friday

According to data from the The Steel Index, the import price of 62% iron ore fines at China's Tianjin port was pegged at USD 92.10 per tonne on Monday, up USD 0.30 on the day

Friday Close

Dalian Futures – CNY 680, down by CNY 22 or 3.1% DoD

12M SWAP – USD 92.42 down b USD 2.75 or 2.9% DoD

Spot – USD 91.8 down by USD 3.9 or 4.1% DoD

But, the blip in TSI needs to be viewed with pessimism as we can not expect a sudden rebound in iron ore prices fuelled by restocking by Chinese mills as the steel prices continue to slip with every passing day amid huge overcapacity in China.

On the other hand, we are looking at glut on supply side. Goldman Sachs has predicted that global supplies of iron ore are set to exceed demand by 175 million tonnes next year as the Big 3 Vale, Rio Tinto and BHP continue to increase their capacity.

BHPB is on track at Jimblebar mine to 55 million towards its longer term target of 270 million tonnes per annum

Rio Tinto is ahead of schedule to reach 290 million tonnes per annum and is targeting 360 million tonnes per annum in the longer run

Vale plans to lift its output above 400 million tonnes from the current 300 million tonnes -plus by 2018 as giant projects like S11D in the Carajas complex come on stream.

Anglo American's Minas Rio project in Brazil could add another 26 million tonne before the end of this year

Kumba unit in South Africa return to nameplate capacity of 40 million tonnes plus.

Roy Hill project could pump 55 million tonnes by the end of next year.