SYDNEY, Oct 17 (Reuters) - The economic crisis in Europe has weakened global iron ore prices, though strong demand growth in China should help prop up market fundamentals, Australian miner Fortescue Metals Group said on Monday.
"We're not deterred by some of the short-term softening in the market," Fortescue Chief Executive Nev Power told reporters.
"Most of that appears to be a carry over from the financial uncertainty in Europe and once that is sorted out we'll see most of the volatility and cautiousness in the Asian markets disappear," Power said.
Finance ministers and central bankers of the Group of 20 major economies on Saturday pressed Europe to act decisively within eight days to resolve the euro zone's sovereign debt crisis which is endangering the world economy.
Demand for Fortescue's iron ore in China remained strong, with the company easily selling all it can produce, Power said.
Still, lower average sales prices in the early part of the current quarter at least would affect the current quarter's sales revenue, according to Power.
The price of ore with 62 percent iron content fell 1.69 percent on Friday, its fifth-straight daily decline.
It is now at its lowest in 11 months, and has fallen 13 percent since early September. At $157.50 a tonne on Thursday, it is nearly a fifth cheaper than its all time high of $191.90
Fortescue, Australia's no. 3 iron ore miner after Rio Tinto and BHP Billiton , also said it expects to maintain an annualised production run rate of 55 million tonnes and produce between 13.5 million and 14 million tonnes in the current quarter.
Longer-term, the company was on track to produce at a yearly rate of 155 million tonnes by June 2013, a target that had not been affected by a rise in construction costs in Australia due a sharp strengthening in the Australian dollar, according to Power.
Fortescue shares were up 3.9 percent to A$5.08 at 0309 GMT, outpacing gains in the wider market .
Fortescue earlier on Monday released data showing it had increased total iron ore shipments in the September quarter to 12.36 million tonnes, versus 10.26 million tonnes in the same period a year ago.
Fortescue sells most of its ore to steel mills in China and has been attempting to branch out to other countries in Asia and in Europe as it expands its mines in Australia.
Power also said iron ore may ultimately be priced on a daily basis in order to more accurately reflect supply and demand fundamentals.
BHP Billiton in 2010 led an industry move away from once-a-year-pricing of iron ore to a quarterly -- and in some cases month-by-month system, despite protests by steel mills in Asia, which make up the bulk of Australian iron ore sales.
"Our strategy has been, since the (annual) benchmark pricing was dismantled in March last year, to try and achieve pricing in line with the Platts (commodity) index," Power said.
"We believe that the closer we are to a spot market through some sort of index pricing like that allows the greatest level of transparency and the greatest responsiveness to supply demand in the market," he said.
Fortescue sold its ore at an average of $160 per dry tonne CFR in the September quarter, a little higher than the preceding quarter, according to the company.