Mount Gibson said it would endeavour to reach an acceptable outcome to accommodate its customers, but that the company had no obligation to agree to the requests under the sales agreements.
A number of customers have requested a delay to shipments scheduled for the second quarter of this financial year, Mount Gibson said.
Shares in the company slumped 37.5 cents, or 32.5 per cent, to a low of 78 cents before recovering slightly to close at 87.5 cents.
Mount Gibson said customer and sector analysis had indicated that a slow down in demand for iron ore in China was a result of the economic uncertainty and tightening of credit facilities.
UBS analysts led by Glyn Lawcock said a decline in the spot price and the build up of iron ore stockpiles at Chinese ports and mills indicated that the market for the steel making commodity was weakening.
"Demand softening appears evident from inventory build up at Chinese ports and mills and is not surprising given the worsening global economic conditions leading to a poor outlook for steel and hence iron ore demand," the analysts said in an October 3 client note.
Mount Gibson said on Thursday it was well placed to modify its operations, expenditure and production targets, if required, and would advise on potential impacts when discussions with customers were more advanced.
The company produced 6.9 million tonnes of iron ore during the year to June 30 from its two operations in Western Australia.
