Production suspensions in Chinese manufacturing hub amid COVID-19 outbreak

Several companies in one of China's biggest manufacturing hubs have suspended operations as local authorities try to contain a COVID-19 outbreak, halting production of goods from batteries to textile dyes and plastics.

The coronavirus outbreak has disrupted activities in parts of Zhejiang, an eastern province with a large industrial sector, where many goods are manufactured for export.

At least 20 listed companies have shut down operations in Zhejiang, as tens of thousands of citizens were placed in quarantine, some domestic flights were suspended, and several sporting events cancelled. read more

The outbreak in three Zhejiang cities - Ningbo, Shaoxing and Hangzhou - was developing at a "relatively rapid" speed, health authorities said over the weekend.

The province reported 44 locally transmitted cases with confirmed symptoms on Dec. 13, official data showed on Tuesday, taking the total to 217 just over a week since the first case was reported on Dec. 6. Prior to the current outbreak, the province had reported just one local case this year.

Companies reporting suspended production on Tuesday included Zhejiang Mustang Battery Co Ltd (605378.SS), Guobang Pharma Ltd (605507.SS) and textile dyes maker Zhejiang Runtu Co Ltd (002440.SZ).

Ningo-based Mustang Battery said it expected the outbreak to be brought under control very soon, and the production suspension was a temporary measure that "will not have a long-term negative impact on the company's growth."

Zhejiang Runtu said all its units in the Zhejiang Shangyu Economic Development Zone, which accounts for 95% of its revenue, had been halted since Dec. 9 and it expected a negative impact on its fourth quarter results.

They joined Ningbo Homelink Eco-Itech Co Ltd (301193.SZ), Zhejiang Zhongxin Fluoride Materials Co Ltd (002915.SZ), Zhejiang Jingsheng Mechanical & Electrical Co Ltd (300316.SZ) and Zhejiang Fenglong Electric Co Ltd (002931.SZ).

The companies said they halted operations after local governments in one district in Ningbo and another in Shaoxing curtailed all production bar essential manufacturing. The orders cover all companies in the affected areas, but only listed firms are required to disclose any impact on their business.

More than 50,000 people have been quarantined at centralised facilities across the coastal province of 64.4 million, while a further nearly half a million people were being monitored.