Domestic demand for iron ore and other raw materials has helped China’s largest shipping company weather a first-half decline in trans-Pacific container volumes, as the subprime crisis damped US consumer demand for Chinese-made goods, writes Tom Mitchell in Hong Kong.

China Cosco reported that net profits more than doubled to Rmb15.12bn ($2.2bn) in the first six months of 2008 in spite of a 7.4 per cent year-on-year decline in the number of containers shipped across the Pacific to the US.

Cosco is the latest shipping company to report a fall in trans-Pacific shipments and has cut back services on the once-lucrative route. Its main domestic rival, China Shipping Container Lines, earlier reported a 44 per cent decline in net profits to Rmb637.2m.

While overall demand for Chinese exports remains strong, some product categories have seen steep falls. Southern Guangdong province reported a 31 per cent year-on-year decline in garment exports for the January-July period.

Cosco has responded by shifting capacity from US ports such as Long Beach, California, and New York to Prince Rupert in British Columbia, Canada, saving ships almost three days each trip.