Container manufacturers on the mainland have either stopped production completely or come to a partial halt, reflecting the global slump, said China International Marine Containers (Group) (CIMC), while other industry players warned of worse to come. 'In the fourth quarter, trading of containers slipped as a result of weak demand,' said Shenzhen-listed CIMC, the world's biggest maker of containers. Industry players said China was feeling the impact of the slowdown in demand. Nearly all of the world's containers are made on the mainland because China exports much of the world's goods, said Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council. 'Global demand for containers in general has slowed significantly. The consensus in the industry is mainland exports will be flat in 2009 at best,' said Mr Ho. Singamas Container Holdings, the world's second-largest container manufacturer, is operating at 60 per cent of normal output, partly because customers cannot access financing as a result of the credit crunch, said Sylvia Tam, the Hong Kong-listed company's chief financial officer. Singamas accounts for 23 per cent of the world's containers, and most of its factories are on the mainland. For its latest order for 20-foot containers, Singamas accepted a price that was 16.7 per cent lower than orders in October, said Ms Tam. 'The earliest our business will pick up is the second quarter. Until banks are back to normal operations, business cannot return to normal.' An analyst said CIMC would normally temporarily halt container production in December or January, but this year it halted production in late October. 'So, you can see how bad the market is,' said the analyst. The analyst forecast CIMC's output at only 100,000 dry containers in the fourth quarter, compared with 1.3 million in the first three quarters. He said CIMC's dry container production in 2008 would be 25 per cent lower in volume than 2007 and it would fall another 20 per cent in 2009. Dry containers accounted for 46 per cent of CIMC's operating revenue and 32 per cent of its net profit of 1.7 billion yuan (HK$1.92 billion) in the first three quarters. 'Who wants to buy containers when there's no trade? All shipping and leasing companies are scaling back their purchases,' said the analyst. The Asia-Europe shipping route, the world's fastest-growing shipping lane early this year, had declined significantly, with the lifting rate per container in the third quarter falling to 2006 levels, the analyst said. 'The rates are now barely able to cover costs,' the analyst said. On transpacific shipping routes, container rates had dropped to US$1,300 per 40-foot container from US$1,800 this summer, said Mr Ho. 'Even this year, the majority of shipping lines are already reporting losses in transpacific trade. The situation will worsen next year.' The most difficult period for the container shipping business would be the first quarter of next year, partly because that is the traditional low season when mainland workers go home for the Lunar New Year, said Mr Ho. 'Very little cargo will be carried in the first quarter. Shipping lines will operate with substantial losses.' Whether shipping lines survive would depend on their financial strength, said Mr Ho. 'I won't be surprised to see more mergers and acquisitions, and smaller shipping lines going bankrupt.' Singamas shares rose 18.18 per cent to 65 HK cents yesterday, while CIMC rose 4.63 per cent to 7.68 yuan in Shenzhen.