Global miner Rio Tinto Ltd said it expects iron ore prices to come under pressure in the second half of the year on slower growth in steel demand from top customer China and increased supply.

Rio Tinto, the world's second-biggest iron ore producer behind Brazil's Vale, has stuck to an aggressive expansion plan in iron ore even after the market was rattled for much of last year by doubts over future demand from China.

"We're seeing steel demand growth slowing inevitably. That is going to put downward pressure on iron ore prices," Greg Lilleyman, Rio's head of Pilbara iron ore operations, told a conference on Tuesday.

"We're going to see downward pressure in the second half and perhaps beyond, but we still see pretty strong prices," he added.

Fellow miner BHP Billiton said iron ore prices were likely to remain volatile in the short term as more supply came on stream, and noted that Chinese demand for commodities was moderating

In notes prepared for an address at the same conference, BHP said it expected demand growth in China for many of its core products at about 2 percent to 4 percent a year, without naming iron ore.

Iron ore prices shed 10 percent last week as a drop in Chinese buying fuelled concerns that a hoped-for pickup in construction activty was not occuring.

Benchmark 62-percent grade iron ore stood at $134.60 a tonne on Tuesday, hovering just above a near three-month low hit late last week.

China is the world's biggest customer for iron ore, but high steel stockpiles and government efforts to curb housing prices have cast doubt on the pace of steel demand growth this year.

Lilleyman said Rio was well advanced in its aim of boosting iron ore output by about 15 percent this year to 290 million tonnes, while a longer term target of 360 million tonnes by 2015 was also on schedule.

"We certainly still forecast steel demand growth over the next 5-10 years somewhere around 3 percent ... essentially peaking roundbout 2030 at around 1 billion tonnes," he said.

Steel demand in China stood at around 680 million tonnes in 2012, based on analyst and industry estimates. Crude steel output reached a record 716.5 million tonnes, up 3 percent from 2011. Rio Tinto operates 14 mines in the Pilbara region of Western Australia, served by 1,500 km (900 miles) of railways and three ports.

The miner, which derives more than two-thirds of its revenue from iron ore, is confident its rich ores and low cost operations can still provide adequate profit margins despite any cyclical downturns in the market.