Mining giant Rio Tinto says it will not curtail iron ore production to deal with weak prices and subdued steel demand in China.
Rio's head of iron ore Andrew Harding said sentiment did affect the iron ore price but the daily price was set by supply and demand.
"The reality is this is a long-term game and what you're trying to do in the long term is match supply to demand," Mr Harding told a business breakfast in Perth on Thursday.
Mr Harding said demand rose incrementally while supply arrived in chunks as new mines came online.
"If you think for one second that you can just take some volume out and no one else will move to fill that volume, then you're fooling yourself," he said.
"You can't do that unless you control all the supply and we don't. Rio Tinto doesn't and Australia doesn't."
Australia could not turn off the iron ore tap to regulate the global market-based price, he said.
Rio Tinto predicts the world will demand around three billion tonnes of iron ore by 2030, a two per cent average increase from 2015 levels.
It expects more than half of the expansion in global iron ore demand to be supplied predominantly by Australia and Brazil.
The world's second largest iron ore miner says Chinese steel demand is expected to grow at a rate of one per cent per annum.
Rio recently maintained its guidance of shipping around 340 million tonnes of iron ore in 2015 after posting a 17 per cent jump in exports in the September quarter.
The spot price of iron ore is trading around $US48 a tonne, near 10-year lows.
Shares in Rio Tinto were 46 cents, or 0.9 per cent, lower at $50.39.
Share
