China urges industries to resume operations amid virus

The Chinese government today urged more companies to resume operations, especially in sectors critical to fighting the coronavirus outbreak, amid indications the spread of the disease may be slowing.

"The important areas of the national economy and people's livelihoods should be resumed immediately and production should be restarted," Cong Liang, secretary general at China's top economic planning agency the NDRC, said today. "Major projects should be returned to work and started as soon as possible."

Most provinces other than Hubei, the epicentre of the outbreak, are gradually returning to work, especially in key areas such as medical supplies, energy, food, transportation and logistics, he said.

The supply of electricity, natural gas and refined oil is sufficient, while civil aviation, railway, and water transport networks are operating normally, Cong said. Capacity utilisation rates have recovered to 57.8pc for coal mines and above 76pc for producers of face masks, according to the latest data from 22 provinces on 10 February.

Measures by some localities to restrict the movement of people, and to require approvals before businesses can restart, are too prohibitive, the NDRC said.

"We will strictly stop the practice of restricting the resumption of production... by simple and crude methods such as approvals," said Ou Xiaoli, the agency's director of social development.

Road closures and vehicle restrictions played an important role in slowing the outbreak in its early days, but those measures have also brought inconveniences and blocked the transportation of key materials and migrant workers, director of transportation services Xu Yahua said. The policy is now to ensure that highways and roads are open and capacity is adequate, with priority given to emergency supplies to Hubei, he said.

The comments helped boost some commodity futures today. The May iron ore contract on the Dalian commodity exchange (DCE) rose by 4.4pc to 605.5 yuan/t, while coking coal rose by 3.2pc to Yn1,264/t and met coke rose by 3.1pc to Yn1,855/t. May rebar futures on the Shanghai futures exchange rose by 2.7pc to Yn3,392/t while hot-rolled coil rose by 2.2pc to Yn3,378/t.

Indication that the spread of the coronavirus may be slowing led some steel traders to become more bullish on demand, but they warned the situation remains serious.

There were 2,478 new confirmed cases in China yesterday, according to government figures. The number of new cases has started to trend lower in recent days, although the data are volatile. The number of new Chinese cases outside Hubei province fell for a seventh consecutive day, to 381. But the death toll in China rose by a record 108 to 1,016.

By Chris Newman