Australia's Fortescue Metals Group expects iron ore prices to stabilize as China moves to curb market speculation, which triggered a recent run-up in the price of iron ore futures, the miner's chief executive said on Wednesday

"The Chinese government wants more market forces to drive the economy and they are encouraging those processes," CEO Nev Power told reporters on the sidelines of a conference in Sydney.

"On the one hand the Chinese government wants to drive the economy with that process. But on the other hand, they do not want it to get out of control," he noted.

Iron ore prices have jumped more than 45 percent since the start of the year on the back of a pickup in demand from Chinese steel mills and futures speculation, but major miners expect prices to fall back later this year due to oversupply.

The China Securities Regulatory Commission has said it won't allow the futures market to become a "hot-bed" for speculators and urged commodity exchanges to curb excessive speculation following a surge in prices.

Power said he expects some volatility to continue in iron ore trading but noted that much of the world's higher-cost production was eliminated during last year's period of low ore prices, enabling fundamental market forces to exert greater influence.

"We are pleased to see the Chinese government starting to say this is not designed to be a highly speculative exchange, we want producers and users to be the main participants," Power noted.

Power said Fortescue, the world's fourth-biggest iron ore miner, was mining and shipping ore for an average price of around $30 a ton, or about half the current benchmark spot price.

Reuters