As the fall in the iron ore price continues to send shockwaves through global markets, mining giant BHP Billiton says its focus on productivity is starting to deliver value to its iron ore business and it expects demand for steel to grow over the next decade.
Speaking at the AJM Global Iron Ore and Steel Forecast conference in Perth, BHP's iron ore president Jimmy Wilson said the group remains confident global demand for iron ore will continue to grow, though likely at a more moderate rate, driven by urbanisation and industrialisation.
"Our market outlook is for continued strong steel demand growth over the next 10 years," he said.
"Our view that Chinese crude steel production is expected to peak at 1.1 billion tonnes, around 2025, is unchanged."
Recent world iron ore growth had been driven by Australian production, he said.
Mr Wilson added that demand over the next 10 years would be maintained as 1.2 billion people globally moved to urban areas, including 240 million people in China.
He said BHP expects global iron ore supply to outpace demand over the medium term.
The comments come as the iron ore price charted its largest one-day fall in more than four years overnight on persistent fears over China's economy.
Benchmark iron ore for immediate delivery fell to $US104.70 a tonne, which pushed the commodity into bear market territory.
Data over the weekend showed China posted an unexpected trade deficit of $US22.98 billion ($A25.32bn) in February, compared with a surplus of $US14.8bn in the same month last year, which stoked fears of a slowdown in China and a weakening iron ore price.
Mr Wilson said BHP will retain a favourable position on the iron ore cost curve underpinned by the quality of its resource base.
"These resources further position us to benefit from an increasing market preference for high quality lump and fines iron ore products," he said.
"Our iron ore business is well positioned to deliver high margin volume growth at a lower cost without the need for an additional mining hub or major port and rail infrastructure."
Mr Wilson also said the miner plans to sell its west African iron ore assets.
"We want to move out of our west Africa position," he said.
The company is still targeting overall Pilbara iron ore production of 212 million tonnes per annum in full year 2014.