China's steel mills rejected the iron ore pricing deal Rio Tinto inked with Japanese and South Korean rivals last week, which analysts expect will make its negotiations with the global miner more complicated.

The China Iron and Steel Association (CISA) on Sunday said in a statement that the price cut of 33 percent for iron ore fines and 44 percent for lump iron did not reflect the real supply and demand situation in the international market.

"Such a price would drive Chinese mills into large scale losses," it said. "So, Chinese iron and steel enterprises cannot accept this price."