UPDATE 1-China's CIMC halts some output amid slack business

(Adds details, shipping freight rate cut)

SHANGHAI, Dec 5 (Reuters) - China's CIMC (200039.SZ) (000039.SZ), the world's largest shipping container maker, has stopped the production of dry vans, used for shipping general cargo, for two months, the official Xinhua news agency said on Friday.

An official at China International Marine Containers (Group) Co (CIMC) confirmed to Reuters that production would be halted but declined to confirm the duration, adding that business was slack and the company had allowed more staff to take leave this year than in previous years.

"The fourth quarter is typically a slow season for our sales and a season during which we allow our staff to take leave and suspend some non-essential business," said the official, who declined to be named due to corporate briefing rules.

"This year, our business has been hit by the global financial crisis, so we are allowing more staff to take leave," he added.

The dry van business accounts for less than 50 percent of the company's net profit each year, the official said. He declined to comment further, saying that the company would issue a statement over the weekend with details.

The financial crisis has also forced shippers to cut freight rates, with Danish shipping and oil group A.P. Moller-Maersk (MAERSKb.CO) slashing rates from Asia to the U.S. West Coast by nearly one-quarter to $1,300 per forty-foot equivalent unit, industry sources said on Friday.

China COSCO (1919.HK), a listed arm of the country's largest shipping conglomerate, has followed suit as slowing trade growth due to weak demand from the United States and Europe continues to pressure shipping rates, one of the sources told Reuters. [ID:nHKG340844]

Xinhua cited a CIMC executive as saying that about 22,000 employees in the dry van sector, or 38 percent of the company's total work force, had been put on paid leave, although the company had not laid off any workers.

"CIMC stopped dry van production, as the global financial turmoil has hit demand for container purchases. But the company has sufficient capital flow to withstand the turmoil," Xinhua quoted the executive as saying.

In addition to dry vans, CIMC produces special containers, container hoisting facilities, and road transportation and airport equipment.

Trading in CIMC's shares was suspended on Friday. (Reporting by Lu Jianxin; Editing by Edmund Klamann)