OVERCAPACITY in China's container manufacturing industry led to an 11.4 per cent fall in the price for box exports produced in Guangdong during the first 11 months of 2006.

This is despite the city's box export volume rising 11.9 per cent year on year during the same period, Xinhua News Agency reports.

An expert cited in the report forecasts that by the end of 2007 China will be producing six million TEU, far exceeding world demand. As a result of oversupply in the market and stiff competition among container manufacturers, the price of empties has been declining since the second half of 2005.

The government is expected to impose tighter quality control standards on container manufacturers, who will also be encouraged to produce more specialised containers to widen the product range. Box makers may also be advised to form partnerships with the large shipping lines to create more stable demand.