China Shenhua Energy Co, the country's top coal producer, expects Japanese and South Korean clients to pay at least as much as Chinese customers for this year's annual contract prices, its board secretary, Huang Qing, said on Monday.

Earlier Chinese media reports had said Shenhua had offered lower prices to overseas clients, but Huang denied this.

We treat our domestic and overseas clients fairly. It's impossible that we would offer lower prices to overseas clients than domestic clients, Huang told Reuters.

The negotiation has not concluded yet and therefore the price is still unknown.

Huang also said a local newspaper report that Shenhua expected the term price with Japanese and Korean clients to be 540 yuan, or $79, a tonne was wrong.

Overseas clients are still negotiating what grades of coal they would buy. One can't simply take the price, 540 yuan, that we've reached with domestic clients on annual supply contracts for coal with 5,500 kcal/kg at ports, divide by 6.8 and come to the conclusion that we wanted to sell to overseas clients at $79. It's definitely wrong.

Huang said he did not know when the negotiation would end.

Shenhua said earlier that by the end of the first quarter, it had accomplished its target of signing the domestic long-term contracts for the year. Price for thermal coal with calorific value of 5,500 kcal/kg was increased to 540 yuan a tonne, including of value-added tax.

China's top five power generating groups have not yet finished signing this year's annual supply contracts, industry sources said.

The company strengthened the relationship with major customers and explored small and medium customers, said Huang. But he declined to comment on whether Shenhua has signed annual term contracts with the top five power firms.

Shenhua's commercial coal output in May jumped 19 percent from a year earlier to 18.2 million tonnes, but coal exports tumbled 60 percent on the year to 800,000 tonnes, the company said in a statement. ($1=6.838 Yuan)

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