Australia’s biggest iron ore miner Rio Tinto appears to have bowed to Chinese pressure, after saying it is being forced to move to shorter-term pricing.

Chinese steel makers that are locked into quarterly contracts have been demanding lower prices, as the spot price has plunged from record levels of about $US180 a tonne to below $US150.

Chinese economic growth slowed to a two-year low last month, as credit tightened in an effort to control inflation.

The steel makers want the prices they pay to reflect the lower spot prices.

Rio Tinto chief executive Tom Albanese said “current market weakness” was accelerating the move to shorter pricing methods and closer to spot.

Currently, 86 per cent of third quarter sales were quarterly lagged, he said.

It was reported last week that the world’s biggest iron ore producer, Brazil’s Vale, had agreed to price cuts to reflect the recent falls.

Rio Tinto’s shares fell 10.5 per cent last week, with the biggest falls following that news.

It clawed back nearly half of those losses on Monday, improving $3.06, or 4.89 per cent, to close at $65.63.

Rio Tinto would be moving to a “portfolio sales approach with a range of pricing periods linked to quoted spot indices”, Mr Albanese told an analysts’ briefing in Sydney on Monday.

He said the current economic environment was volatile and other challenges included delays in supply of equipment.

However, Rio’s long-term outlook was unchanged with the company’s strong balance sheet leaving it well placed.