Mining giant Rio Tinto (ASX: RIO) forecast over the weekend another slump in iron ore prices in the next 18 months. Viviel Tulpule, chief economist of Rio Tinto, estimated the price of the key steelmaking ingredient would decline to just above $100 per tonne by September 2014.

The Rio official explained the anticipated lower prices on excess capacity and lower demand for iron ore in China, the largest market for the commodity.

Chinese steel industry stakeholders, however, belie Rio's gloomy outlook. Li Xinchuang, deputy secretary of the China Iron and Steel Association, said demand for iron ore is expected to expand 5.7 per cent for 2013 to 1.11 billion tonnes.

In 2012, China increased its iron ore imports by 8.43 per cent, but prices of the commodity plunged to a three-year low in September 2012 to $86 per tonne.

The Rio forecast comes amid the accusation by China's National Development and Reform Commission (NDRC) that the world's three largest miners delayed shipments and held back stocks of the commodity to create an artificial supply shortage and justify price increases.

The three, BHP Billiton (ASX: BHP), Rio and Vale of Brazil, account for two-thirds of global supply of iron ore. They denied the NDRC's charge of collusion and insisted that they produced iron ore at full capacity and sold all of their produce.

BHP, in a statement, said it sells significant volume of its iron ore on a spot basis, including widely accessible trading platforms, regardless of the price of the commodity.

As of Wednesday, March 6, iron ore price was at $145.80 per tonne, down from the peak price of $158.90 in early February.

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