"This means people have been destocking and probably the reason they were destocking is there was a lot of pessimism over the last number of months over future growth prospects," Kaplan said.
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Destocking was a top 2016 priority for the property market.
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Why does— ROBERT KAPLAN: Just means people have been destocking.
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As a result, destocking in these cities tends to lag behind.
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When do you think the destocking process will complete in China?
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"We can't tell how long this destocking would continue," Nagamori said.
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The rate of inventory destocking appears to be quickening in recent months.
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Analysts expect solid fundamentals for Chinese sportswear brands following destocking in the previous year.
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China's government has set destocking its main goal for the real estate sector this year.
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"The sector still faces long-term destocking pressures," Mr. Zhao wrote on Monday in an email.
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The government is running a "destocking" program, which pays herders for animals they would struggle to sell.
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HanesBrands has not lost market share, and the destocking cycle among retailers will come to an end.
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The rate of inventory destocking appeared to be quickening in response to robust demand in recent months.
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"Buyers are destocking," he said, declining to be identified as he was not authorized to speak with media.
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"The revamp not only improves people's livelihood, but also helps with investment, consumption and inventory destocking," the cabinet said.
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"This fund aims to facilitate the destocking and deleveraging process," said Zhou Hao, senior emerging markets economist at Commerzbank.
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Because China is obviously not a market economy, it can avoid painful destocking for longer periods than other economies.
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In diamonds, the closure of some U.S. retail stores, growth in online purchasing and destocking dented demand in 2019.
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Goldman Sachs analyst Yi Wang said in a research report last week the government should do more to promote destocking.
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Destocking, as well as poor export demand as a result of the strong dollar, is also weighing on manufacturing output.
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Revenue at its smaller materials division was lean, as destocking by clients led to lower sales of engineering plastics and resins.
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IIP is likely to remain weak in June as sales may have suffered on account of destocking ahead of implementation of GST.
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The curbs have had a clear impact on the market, reining in house price inflation, tempering home sales growth and encouraging destocking.
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Whether Beijing will try to fight off destocking with yet more pump-priming monetary policy would be an important question any year.
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Among the developer stocks, Goldman said it preferred stocks of companies focused on destocking and operational improvement, such as Agile, Shimao and Yanlord.
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Full-year GFA sold outpaced GFA started for the first time in 2852, driven by homebuilders' destocking and reduction in new-home construction.
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"Until we see meaningful destocking in the tier 3 and 4 cities, then we can't expect construction activity to pick up," said Zhong.
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Consumer products grew 1 percent to $3.23 billion, held back by a slowdown at retailers, inventory destocking and economic issues in Latin America.
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Analysts had been expecting first quarter cognac sales to be held back by inventory reductions following recent price increases and destocking in China.
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The destocking cycle could, however, begin to reverse, as some companies now only have land bank reserves for two to three years of development.
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Chinese proprietary brand dealer inventory levels peaked at 2.5 months in April 2017 and remained high at 1.9 months in May after aggressive destocking.
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This was despite pockets of weakness, such as retailers destocking in Russia and the United States after a late start to the flu season.
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After struggling in 22016, destocking finally began to pay off with inventory ratios turning down from April 220 and falling to 22015 by December.
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A downturn in capital spending by energy companies, reeling from a collapse in oil prices, and inventory destocking by businesses are also constraining growth.
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"It confirms Q1's blip was a combination of not just rebates but also wholesaler destocking," Deutsche Bank's Tim Race wrote in a note.
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"There are signs that global economy is recovering and industrial products are expected to finish destocking cycle in December and start to restock," Tang added.
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Dental supplies maker Dentsply Sirona shares dropped on Tuesday after the company cut its earnings and revenue estimates for 2018, citing destocking from partner dealers.
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The new supply stream has also coincided with significant changes to China's battery landscape occasioned by new EV subsidies with battery plants accordingly destocking and retooling.
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"This cycle is different as developers have taken advantage of the strong demand and are destocking," said Alexander Wolf, Standard Life Aberdeen senior emerging markets economist.
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"The property boom has been a very good thing for destocking, but that doesn't mean the government can just sit back and relax now," she said.
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"Because many of the GST rates on manufactured products were lower than the earlier cumulative tax rates, there was destocking as well as lower manufacturing," Godrej.
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Zhou also said that China's housing market is facing big destocking pressures and it should let local governments play a bigger role in stabilizing the market.
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And probably the reason they were destocking is there was a lot of pessimism over the last number of months about, you know, future growth prospects.
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The company said it expects revenue for the year to decline 2 percent as a result of inventory destocking by partners who sell Dentsply Sirona products.
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Automobile sales in June were strong across segments albeit on a low base due to destocking undertaken by dealers prior to the implementation of GST last year.
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Current zinc ingot inventories are "extremely low" and the next two-three months will see "intense destocking" as consumption in China recovers, Jinrui Futures said in a note.
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BEIJING (Reuters) - China's property risks have been effectively resolved, with destocking efforts in third- and fourth-tier cities achieving results, a spokesman for China's statistics bureau said Thursday.
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October saw what Goldman Sachs analyst Lindsay Drucker Mann called "the great inventory destocking" as producers cut back on shipments to retailers who had too much on hand already.
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Xinhua also said on Monday a report from Vice Premier Zhang Gaoli to the country's political advisory body pledged to steadily push forward with destocking in the property market.
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Rising coal deliveries, increased oil and gas production, and the end of the destocking cycle should all combine to produce a significant increase in diesel consumption in 2017/18.
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Ramirez said destocking by China was weighing on agricultural markets and this strategy could continue for another 18 months after which the country would need to renew its reserves.
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We see little risk to KTB's initial FY19 sales and EBITDA guidance, which contemplates the rollout of a global ERP platform, headwinds from the SHLD bankruptcy, and WMT destocking.
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But despite clear signs of destocking in some lower-tier cities as sales boom and new construction slips, many small centers still have a large glut of unsold homes.
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President Xi Jinping was quoted in November as saying that "destocking the property market" and "promoting the sustained development of the sector" were important tasks for the coming year.
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Our bottom line is that we see demand growth slowing further, with some destocking likely, and have yet to see the policy response to cause [Purchase Manager Indexes] to stabilize.
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The cut in Citi's forecasts is driven by the firm's view that "2018 iPhone is entering a destocking phase, which does not bode well for the supply chain," Yang wrote.
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The report cited negative price pressures in every segment for the latest quarter, a disproportionate hit to the company from industry destocking and rising costs for consumer packaged goods companies.
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BEIJING, Oct 19 (Reuters) - China's property risks have been effectively resolved, with destocking efforts in third- and fourth-tier cities achieving results, a spokesman for China's statistics bureau said Thursday.
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Analysts such as those at BMO are looking for some improvement after the seasonal slowdown months of northern hemisphere summer and as destocking through the manufacturing chain comes to an end.
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The analyst believes destocking in lower-tier cities will be supported, while more policy tightening will take place in tier-one, high tier-two and satellite cities where prices are high.
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"A likely destocking in iron ore and falling steel margins may weigh on iron ore prices in the short term," ANZ strategists Daniel Hynes and Soni Kumari said in a report.
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"Appropriate demand expansion should be complemented by trimming overcapacity, inventory destocking, deleveraging, cost reduction and improving weak links in the economy," Chris Leung, an economist at DBS, said in a note.
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But to the extent higher prices put an end to Chinas restocking, or induce destocking, the pick-up in consumption is likely to prove smaller than some oil market bulls anticipate.
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BEIJING (Reuters) - China's housing market is facing big destocking pressures and it should let local governments play a bigger role in stabilizing the market, central bank governor Zhou Xiaochuan said on Saturday.
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The pallets and container group had initially attributed the lower forecast to unexpected destocking by U.S. retailers that impacted volumes and resulted in increased costs associated with higher-than-expected pallet returns.
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"In third- and fourth-tier cities, despite some improvement under government stimulus policies, the real estate market is still facing heavy destocking pressure," Wanda Commercial President Qi Jie told an earnings conference.
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The actions of authorities, who also stressed the need to actively push for inventory destocking in smaller cities experiencing a housing glut, have spread investor activity more broadly rather than halting it outright.
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"We are not confident that this level can be sustained because the second half is going to represent changing conditions in Chinese stainless steel demand and therefore destocking," said Macquarie analyst Vivienne Lloyd.
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The area of property sold grew 10.2 percent in May, compared with a 7.7 percent increase in April, reflecting a quickening in destocking of existing homes in smaller cities, a Reuters' calculation showed.
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Henkel's struggling beauty business, which makes Schwarzkopf shampoo and Dial soap, reported another fall in organic sales of 2.2%, which the company blamed on fierce competition in western Europe and destocking in China.
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"With inventory levels having reached a very low level following a period of destocking, we are seeing customers return to the market, supporting an improved pricing environment," Mittal said in a statement on Thursday.
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Gerresheimer has run into problems in recent years including increased regulatory requirements for its big pharma customers in the United States - the world's biggest drugs market - destocking of inventories and an unscheduled furnace repair.
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"Developers who picked up destocking will (now) need to speed up construction as the government continues to support the sector," S&P corporate ratings director Cindy Huang said in a conference call with reporters.
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Jacques Breytenbach, Petra's finance director, said pricing at Cullinan was variable from one period to the next, and that the market tended to be weaker at the end of the calendar year due to destocking.
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"Fuel oil cracks should weaken as we move through (second-half 2018) as seasonal demand support wanes and destocking pressures from a highly backwardated market ... compensate for growing tightness in the fundamental balance," JBC said.
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FADING BEAUTY Henkel's struggling beauty business, which makes Schwarzkopf shampoo and Dial soap, reported another fall in organic sales of 2.2%, which the company blamed on fierce competition in western Europe and destocking in China.
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"The material cut in our forecasts is driven by our view that 2018 iPhone is entering a destocking phase, which does not bode well for the supply chain," analyst William Yang wrote in a client note.
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"The material cut in our forecasts is driven by our view that 2018 iPhone is entering a destocking phase, which does not bode well for the supply chain," analyst William Yang wrote in a client note.
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"We did have some destocking at the speciality pharmacy in Q1, but we believe we'll overcome that in subsequent quarters and are looking forward to a strong year," he told reporters on an afternoon conference call.
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"The prevailing sentiment at the moment appears to be that industry sell-through patterns and retailer inventory destocking trends should largely normalize by fall 2017," wrote Wunderlich analyst Rommel Dionisio in a note following Sturm Ruger's report.
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"If inventories can't be digested quickly, steel factories will once again face relatively large destocking pressures," CFLP said in a release, adding that steel inventory by March 31 was 29.6 percent higher than the same time last year.
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BEIJING, June 26 (Reuters) - China will steadily push forward with destocking in the property market, the official Xinhua News Agency said on Monday, citing a report made by Vice Premier Zhang Gaoli to the country's political advisory body.
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"The trade war between the U.S. and China significantly impacted demand for Croda products ... sales were adversely impacted by significant ingredient destocking in the summer months as customers adjusted inventory to the lower than expected demand," Croda said.
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Destocking has been slow because most of Wuzhou's projects are located in third-tier and lower-tier cities, and Fitch expects the sell-through ratio to be low at 45%-50% in the next two to three years.
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More specifically, Cabot's results were impacted by a downdraft in spot carbon black pricing in China, weak demand (including plastics industry channel destocking) and diminished margins in its Specialty Carbons business, and owing to some adverse feedstock differentials during the quarter.
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The idea here is simple: Destocking is generally taken as a good sign for growth outlook, because the aggregate demand is expected to snap back up as industrial production accelerates to restore inventories (-to-sales ratios) to their desired levels.
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HONG KONG, Aug 22 (Reuters) - Hong Kong's Li & Fung Ltd , which supplies clothing and other products to retailers worldwide, on Wednesday reported a 45 percent fall in first-half profit amid continued destocking, store closures and bankruptcies among its customers.
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"The cumulative impact of the uncertainty, as well as ... all the stocking and destocking that we've seen, has definitely had a negative impact on momentum, which has become significantly more negative over the last three months or so," he said.
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China's growth came in the strongest of Covestro's various geographies in the third quarter but the 25 percent rate achieved must be taken in the context of particularly weak year ago comparables given the destocking underway in China during the same period of 2015.
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"The balance between demand and supply in the cities we're in has improved a lot...so we don't need to push for destocking in these cities," said an official of state-backed China Resources Land, with 74 percent of its projects in major cities.
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A notable difference in this year's report is the lack of emphasis on destocking the housing glut in tier-3 and tier-4 cities, which some analysts say reflects a more cautious stance as prices have risen sharply in some smaller cities as inventories fell.
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S SANDOZ HEAD SAYS 2018 SALES GUIDANCE DOWNGRADE FOR GENERICS BUSINESS BASED ON RIXATHON DELAY IN U.S., SLOW GLATOPA 40 MG LAUNCH DUE TO PRICING PRESSURE AND SIGNIFICANT DESTOCKING IN RUSSIA IN FIRST HALF OF YEAR Source text for Eikon: Further company coverage: (Reporting by John Miller)
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But Goldman estimated that the market was only about a third of the way into destocking property supply nationwide, citing CREIS data that showed inventory in tier one, two and three cities had fallen from peaks of 19-23 months' worth of supply to around 8-10 months currently.
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"China will maintain the position that homes are for living in, not for speculation," the report said, adding it will continue to adopt a differentiated approach on property policy, which suggests the government will continue to crack down on speculation to prevent bubble risks while destocking inventories in some smaller cities.
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Airbus agreed on Monday to buy a majority stake in Bombardier's CSeries jetliner program, grabbing control of a struggling competitor at the second attempt and giving the Canadian plane-and-train-maker an unexpected boost in its costly trade dispute with Boeing Co. The lab equipment maker cut its profit and sales forecast for this year after destocking by some customers and a temporary freeze of deliveries from Puerto Rico caused by Hurricane Maria, while keeping medium-term targets steady.
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Active destocking caused the Lehman wave and reactive destocking deepened it. The strong dip in the manufacturing industry seen at the end of 2008 was caused by cumulative and synchronized active destocking followed by reactive destocking, triggered by the bankruptcy of Lehman Brothers. Said bankruptcy created a sudden peak in the Libor interest rate, causing the banks to recall credit and companies to start freeing up cash by active destocking, so reducing their stocks. When the customers of a company start active destocking it is experienced by said company as lower demand and said company will respond by doing reactive destocking.
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The term "reactive destocking" is relevant when it is used in connection with active destocking. Active destocking refers to an active decision to reduce the inventory to sales ratio of a company. In general, active destocking is done following an autonomous, often financial decision by a company to improve its efficiency, freeing up cash and reducing its costs. Decisions for active destocking in general are made by financial executives or general managers.
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Reactive destocking in supply chain management is a reduction of the inventory when expected demand goes down. When a company is only doing reactive destocking, the desired inventory to sales ratio, remains unchanged. Reactive destocking in general is done by operational managers of the logistical activities, without additional instructions. The inventory can include finished products, raw materials and/or goods in process.
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Stocking and destocking of soil carbon are under strong climate influence. They are normally balanced through an equilibrium between production and mineralization of organic matter, but the balance is in favour of destocking under present-day climate warming, and more especially in permafrost.
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The first described Lehman wave was caused by global active destocking, followed by reactive destocking after the financial panic following the bankruptcy of Lehman Brothers on September 15, 2008. The Lehman Wave can have strong effects on the sales volume and therefore on the profitability of companies higher in the value chain.
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Active and reactive destocking explains why some companies can see a strong dip in sales while their end markets are fairly stable. If the supply chain between a company and its end-customer would have a stock depth of "250 days' sales", meaning that it takes at least 250 days for a molecule to travel from a companies' warehouse to the end consumer, and if each firm in such a 250-day supply chain decides to do active destocking of 12%, an amount of stock equal to 30 days’ sales (a whole month) is taken out of the chain. For a company at the beginning of the supply chain this will result in either a business standstill for a whole month or a 33% decline during three months. This discovery of active destocking, reactive destocking and the Lehman Wave can have important implications for manufacturing scheduling, inventory management, work force management and budgeting.
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Active and re-active destocking explains why some companies can see a strong dip in sales while their end markets are fairly stable. If the supply chain between a company and its end-customer would have a stock depth of "250 days' sales", meaning that it takes at least 250 days for a molecule to travel from a companies' warehouse to the end consumer, and if each firm in such a 250-day supply chain decides to do active destocking of 12%, an amount of stock equal to 30 days' sales (a whole month) is taken out of the chain. For a company at the beginning of the supply chain this will result in either a business standstill for a whole month or a 33% decline during three months. This discovery of active destocking, reactive destocking and the Lehman Wave can have important implications for manufacturing scheduling, inventory management, work force management and budgeting.
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A reduction of inventories under stable or slightly decreasing sales can only be achieved if purchases are reduced or postponed. As a consequence of the decision to reduce inventory, therefore, many companies substantially reduced their purchases of supplies or raw materials. Obviously, companies further upstream in the supply chain were hit more than companies downstream. Therefore, the Lehman wave can be described as a synchronized bullwhip caused by active destocking, followed by reactive destocking.
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The environmental impacts caused by livestock keeping include burning of forestry – preparation of pastures, soil erosion and compartment. The mitigation measures being advocated are destocking, zero grazing, and controlled burning.
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To control the rate of erosion, colonial authorities introduced voluntary destocking initiatives for livestock. When these met with little success, the destocking programme became mandatory in 1941, forcing all residents of the TTLs to sell or slaughter animals declared surplus. Another 7.2 million acres were also set aside for sale to black farmers, known as the Native Purchase Areas. During the early 1950s, Southern Rhodesia passed the African Land Husbandry Act, which attempted to reform the communal system in the TTLs by giving black Africans the right to apply for formal title deeds to specific tracts.
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When a company takes an active destocking decision, said company expresses the wish to reduce the inventory to sales ratio. In a real world, the actual inventory can first go up, before going down, depending on the behavior of the other players in the supply chain.
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Upon returning to France, Thierry Petit met David Dayan, a recognised specialist of destocking and the then president of France Export. Already competing with vente-privee.com (known at the time as Cofotex) on the physical market, Dayan was looking to launch an online venture and joined forces with Petit to benefit from his digital expertise. Showroomprive.com is officially launched in October 2006.
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Shooters had been employed on Durham and other surrounding properties to cull the brumbies. A shooter on Durham killed 2,200 horses by 1947, and another 8,000 were shot on three other Kidman properties in Queensland. The entire area was struck by drought in 1946 with many cattle dying and properties destocking. Cooper Creek flooded again in 1948 following heavy rain in northern Queensland.
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Water levels came within of the 1906 mark during the 1939 floods. The entire area was struck by drought in 1946 with many cattle dying and properties destocking. The area suffered severe flooding in March 1949 when it was hit with record rainfall. Over the course of four weeks over of rain fell, which as much as it would normally receive over four years.
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End markets also responded by going down, but slower and in most markets not so strongly. The drop in end market plus the active and reactive destocking created a giant damped wave, the so-called Lehman wave. Fig 1: Red curve is the Lehman Wave as a fluctuation around the equilibrium, in this simplified example the black line represents the longer term economic cycle.
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The property has switched from sheep to cattle at some time prior to 1949 following repeated dingo attacks on the sheep. The entire area was struck by drought in 1946 with many cattle dying and properties destocking. The Cooper Creek broke its banks in 1949 again in 1950 resulting in widespread flooding through the area. Struck by drought between 2002 and 2007 the rain arrived producing more feed for stock.
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In 1956 the homestead was the scene of an armed robbery when a man crashed his stolen car nearby then menaced the owner, C. Starky, with a shotgun before stealing one of the station trucks. In 2014 the property was in the grip of drought. The owner, Greg Ballinger, had been destocking cattle since early 2013 and had used thinning permits to feed stock mulga along with supplements to keep the herd alive.
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The property was again struck by drought starting in 2002 with Billy Hayes destocking the property in 2006 when the last of the dams dried up. Billy Hayes died in 2009 died in a quad bike accident at the property. Following the death of her husband Jan Hayes placed the property on the market in 2013 with their son Billy Hayes Junior taking on the management of the property. As of 2014 the property was still on the market.
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Both these papers argue that improper aggregation essentially takes away the opportunity to observe the bullwhip effect. In the beer distribution game (Sterman, 1989), the bullwhip effect is created by a single pulse. In Sterman's experiment, this single pulse is an increase in the demand level. In the case of the Lehman wave that started in September 2008 the single pulse is active destocking, in this case a synchronized decrease in the target inventory-over-sales level along the entire supply chain.
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The strong dip in the manufacturing industry seen at the end of 2008 was caused by cumulative and synchronized active destocking, triggered by the bankruptcy of Lehman Brothers. Said bankruptcy created a sudden peak in the Libor interest rate, causing banks to recall credit and companies to start freeing up cash by reducing stocks. End markets also responded by going down, but much slower and in most markets not so strongly. The de-stocking created a giant damped wave, the so-called "Lehman wave".
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Cattle grazing, which had been confined to the channels and wetlands, was expanded after bores were sunk in the plains away from the channel country allowing stock to roam further. The entire area was struck by drought in 1946 with many cattle dying and properties destocking. Airmail delivery to remote properties in outback South Australia, New South Wales and Queensland commenced in 1949. Nappa Merrie along with other remote properties including Mungerannie, Clifton Hills, Glengyle, Davenport Downs, Morney Plains, Mount Leonard, Durrie, Mulka, Tanbar, Durham Downs, Cordillo Downs, Lake Pure and Naryilco were also on the route.
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The homestead was abandoned for a few years during the 1930s. A plague of rats swept across the property from further north in Queensland in 1940, they were prevented from making it further south by the flooded Cooper Creek. Cattle replaced sheep on the station in 1942 when the manager, Mr Napier, decided that the wild dogs that were prevalent in the area and were inside the boundary fence at the time would cause less damage. The entire area was struck by drought in 1946 with many cattle dying and properties destocking. Airmail delivery to remote properties in outback South Australia, New South Wales and Queensland commenced in 1949.
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The terms "reactive de-stocking" and "active de-stocking" were first used in an article about the Lehman wave, published by Dutch researchers in 2009. A Lehman wave refers to an economy-wide fluctuation in production and in economic activity with a wavelength of between 12 and 18 months, driven by a sudden major disruption of the economic system. The Lehman Wave is a dampened, wave-like fluctuation around equilibrium. The amplitude of the Lehman wave is larger for a business that is further away from its end market than for a business that is closer to its end market, which difference is caused by cumulative destocking of the intermediate supply chain.
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