Australia trimmed its 2013/14 forecast for iron ore exports on Wednesday but still expects shipments to rise 20 percent on the previous year as miners ramp up production, putting pressure on prices.

The government's Bureau of Resources and Energy Economics forecast an average price in 2015 of $103 a tonne, from $110 a tonne this year, still well above some of the more bearish market forecasts.

The bureau forecast iron ore exports would now reach only 631 million tonnes in the financial year to June 30, down from 650 million tonnes in its previous forecast in December.

However, it raised its forecast for metallurgical coal exports to 177 million tonnes in 2013/14 from its previous December forecast of 164 million.

The bureau did not provide any explanation for the downward revision in its outlook for iron ore exports, but the Australian iron ore belt has been hit by cyclone activity and heavy rains in recent months which can impede mining activities.

There are growing predictions among analysts the world will soon be awash in surplus iron ore as demand by China wanes.

In its latest commodities forecast paper, the bureau said Australia's iron ore exports in calendar 2014 should rise 19 percent to a record 687 million tonnes.

Australian iron ore producers Rio Tinto, BHP Billiton and Fortescue Metals are increasing shipments to China, which are likely to top a half-billion tonnes this year, counting on greater economies of scale to provide a leg up over higher-cost producers in Australia and elsewhere.

Rio Tinto's iron ore output alone is scheduled to reach a capacity level of 290 million tonnes a year before the end of the first half of 2014, a 9 percent year-on-year lift.

BHP is forecasting an annualised 22-million-tonne rise in operating capacity to 192 million tonnes. Fortescue is targeting a 155-million-tonnes-per-year run rate over the next month versus 100 million tonnes a year ago.

Growing signs of a downturn in China's rampant steel demand last month drove iron ore prices below the critical $120 threshold seen necessary to keep higher-cost miners in business.

Iron ore for immediate delivery to China .IO62-CNI=SI stood at $111.80 a tonne on Wednesday, according to data provider Steel Index.

Citigroup sees the price falling to $80 by 2016, citing "inescapable market surpluses.{ID:nL3N0M00Z9]

Stock drops among Australia's big three producers suggests investors are growing concerned over exposure to the sector.

So far this year, Fortescue's shares are down 9 percent, Rio Tinto's are down 7 percent and BHP's 4 percent against a mostly flat broader market.