The Shenhua Group said that reports that it had signed a 120 million ton supply contract were erroneous, The Beijing News reports. Media reports had stated that Shenhua had signed a domestic supply contract for 120 tons of coal at a price 5% above last year's average, but according to a company spokesperson, China's five large electric companies had not yet arrived at purchase agreements with the country's coal mines. Contracts are required to be signed before the end of February, according to regulations from the Development and Reform Commission. Production of coal for power generation last year exceeded demand, leaving stored coal levels at their highest point in several years. Yet disagreements over pricing still appeared, since the DRC has decided to deregulate prices. Power companies are fearful of large price hikes once deregulation take place, since in their view the country's coal sector has not achieved the conditions necessary for complete marketization.Link: http://economy.thebeijingnews.com/0392/2006/0222/005@162177.htm