From cancelled hotel bookings ahead of the Lunar New Year to steel piled up at mills because of transport curbs in Hebei province, China’s battle against a new wave of Covid-19 infections clouds what has been a dramatic economic recovery.

New cases in China are at 10-month highs, prompting the lockdown of 28 million people in two provinces, disrupting logistics and industrial activity, with millions expected to scrap holiday travel plans in a blow to China’s efforts to get consumption back on track.

“The worsening coronavirus situation will impact economic activity, and markets may need to temper their expectations for strong pent-up consumption demand in the coming [Lunar New Year] LNY holidays,” Nomura analysts wrote in a note this week.