* Fortescue sees stable iron ore price
* Says China balancing need for investment with futures curbs (Adds CEO quotes, detail, changes dateline to Sydney)
SYDNEY, May 4 (Reuters) - Australia's Fortescue Metals Group FMG.AX expects iron ore prices to stabilise as China walks a fine line to curb market speculation, which triggered a recent run-up the price of iron ore futures, the miner's chief executive said on Wednesday
"The Chinese government wants more market forces to drive the economy and they are encouraging those processes," Fortescue CEO Nev Power told reporters on the sidelines of a conference.
"On the one hand the Chinese government wants to drive the economy with that process. But on the other hand, they do not want it to get out of control," he said.
Iron ore prices have jumped more than 45 percent since the start of the year on the back of a pick-up in demand from Chinese steel mills and futures' speculation, but major miners expect prices to fall back later this year due to oversupply.
The China Securities Regulatory Commission has said it would not allow the futures market to become a "hot-bed" for speculators and urged commodity exchanges to curb excessive speculation following a surge in prices.
Power said he expected some volatility to continue in iron ore trading but said much of the world's higher cost production was eliminated during last year's period of low ore prices, enabling fundamental market forces to exert greater influence.
"We are pleased to see the Chinese government starting to say this is not designed to be a highly speculative exchange, we want producers and users to be the main participants," Power said.
Power said Fortescue, the world's fourth-biggest iron ore miner, was mining and shipping ore for an average price of around $30 a tonne - roughly half the current benchmark spot price.
"The positive we are seeing is the underlying strong demand in China," Power said, adding steel mill margins were also robust.