China's Iron and Steel Association (CISA) said yesterday that Brazilian iron ore giant Vale's decision to raise its prices by as much as 20 percent was "unreasonable" and threatened the international pricing mechanism.

In a strongly worded statement, CISA said the price hike by the world's biggest iron ore supplier, announced on Sept 9, would result in big losses for Chinese steel mills and further impair iron ore trade relations between China and Brazil.

Sources confirmed that Vale had sent emails to Chinese customers demanding that they pay 20 percent more for its iron ore, an exceptional break from the existing price agreement.