Industry under coronavirus: 30 provinces in China resumed work and production

With the noval coronavirus pneumonia gradually under control, China finally ushered in the first round of resumption of work.

Except for Hubei, the remaining 30 provinces have resumed work

At a press conference on the joint prevention and control mechanism of the State Council on February 9, Chen Da, deputy director of the Economic Development Department of the National Development and Reform Commission, said that at present, in addition to Hubei Province, 30 other provinces across the country have deployed arrangements to resume work and production.

Governments of 30 provinces, including Henan and Guangdong, have issued relevant notices on resumption of work and production, requiring returning employees to wear masks to work and receive temperature monitoring, and report the situation immediately. During the construction period, it is necessary to disinfect and clean the places, facilities and equipment where people gather in the factory area, workshop, elevator, etc., and strengthen the ventilation of the workshop area. The corporate canteen is eating at the wrong peak, and only take off the mask at the last minute of the meal, avoid face-to-face meals and group meals. Most companies stopped production for one week due to the epidemic, and lacked supplies of daily necessities and medical supplies. It is reported that the current resumption rate of domestic mask manufacturers is as high as 73%, natural gas and refined oil supplies are sufficient, and civil aviation and railway operations are normal.

Guangdong: Resumption of work and production should be done to ensure that both epidemic prevention and control and safe production are in place. Closely monitor personnel exchanges and health conditions to ensure that epidemic prevention and control mechanisms, employee health investigations, and protective facilities and supplies meet the requirements for resumption of work. In addition, we focus on safety in key areas such as transportation, construction engineering, hazardous chemicals, and fire and gas, and organize special rectification actions for hidden problems to ensure effective prevention and resolution of major production safety risks.

Jiangxi: Prevention and control of epidemic situation, energy supply, transportation and logistics, urban and rural operations, production of medical necessities and food and other daily necessities, feed production, market circulation and sales, etc., are important to the national economy and people's livelihoods. Other enterprises with market orders and production raw materials should give priority to the start of construction. When returning to work, employees in this province must obtain and carry with them a health certificate issued by the unit above the township (street) where they live.

Hebei: Promote the resumption of production and work in different categories. The epidemic prevention supplies, key raw and auxiliary materials, important production equipment and parts, food and other daily necessities are included in the scope of emergency transportation protection, and relevant transportation vehicles are not stopped, inspected, charged, and given priority and convenient access. Coal, electricity, oil, gas and other factors supply and demand markets are dynamically monitored and accurately dispatched to resolutely prevent regional and time-based shortages and sharp price increases.

Construction in 30 provinces has started one after another, alleviating the current tight supply and demand situation of various goods, and the orderly resumption of production and resumption of production by enterprises can ensure market supply. However, a province in Hubei is also one of the strong provinces in the chemical industry. The resumption of work "indefinitely" may affect the supply of chemical raw materials.

It is still unknown when Hubei will resume production, which may affect chemical industry the most.

Hubei is one of the major industrial provinces in China, and Wuhan is one of the most important industrial cities in China, according to statistics. Wuhan's GDP in 2019 ranks ninth in the country, and a large amount of material is transported to all parts of the country through Wuhan. What is the impact of the shutdown in Hubei on the chemical industry?

According to the data of the Ministry of Transport, ports in Hubei are mainly used for domestic trade transportation. The types of transportation include: crude oil, ore, coal and other commodities, machinery products, steel products, and chemical products. At present, Hubei is affected by the epidemic, and production stagnation may affect the upstream and downstream industrial chains.

According to Wind and Guotai Junan Securities research statistics, the largest value-added industry in Hubei Province accounts for the largest proportion of value-added industries in chemical raw materials and chemical products manufacturing. It can be seen that the suspension of production and production in Hubei may affect the chemical industry the most.

The impact of resumption of work in other provinces in the near future

Chemical product manufacturing is directly affected. Industries with large downstream demand are concentrated in rubber and plastics, papermaking and processing, wood and processing industries, and textile industries. These industries have greater impact due to their own demand shocks and chemical demand.

Due to the postponement of resumption of work, the delay of construction activities, and the addition of the impact of automobile chains, there will be a short-term restraint on the demand for black, non-ferrous smelting and metal products.

In Hubei, there are some listed companies of soda ash, chlor-alkali, and inorganic salts in chemical raw materials, while in chemical products, there are some listed companies in compound fertilizers, civilian explosives, and pesticides. Diminished ammonium, paraquat, and glyphosate, etc., the weakening of terminal demand caused by subsequent epidemics may also exacerbate the business risks of some enterprises.

The suppression of the chemical industry in Hubei will have an impact on the national chemical market. However, today's chemical industry chain is long, the downstream demand covers a wide range, production is continuous, and the replaceability of raw materials and products is high. Therefore, it may only bring certain short-term risks to the supply chain within a regional radius. It can be seen that the supply chain risks of the chemical industry are limited, and more are the risks brought by demand suppression.

Safe and smooth resumption of work and production

The Ministry of Transport issued a notice calling for prevention and control of the epidemic situation and speeding up the resumption of highway water transport projects. Except for Hubei Province and other areas with heavy epidemic prevention and control tasks, in principle, preparations should be made for resumption of work before February 15, 2020, and strive to resume work before the 20th of the month.

At present, except in Hubei, enterprises in other provinces have begun to resume production.