Zhitong Finance and Economics learned that China Merchants ** released a research report saying that in July 2023, the U.S. PPI bottomed out and entered passive destocking, and the data in November showed that the United States was still in passive destocking. Historically, the duration of passive destocking is generally 2 quarters (no more than 10 months), so the U.S. may be able to switch to active replenishment by the first quarter of this year at the latest, waiting for data verification at the specific time. In November, 6 of the 14 major industries entered the active replenishment. Of course, the sustainability of these industries still needs to be observed, but in the past few months, it was mainly the two upstream industries that have taken the initiative to replenish the warehouseIt may indicate that the United States is transitioning from passive destocking to active replenishment.
The main points of investment promotion are as follows:
The overall inventory cycle in the United States: it is transitioning from passive destocking to active replenishment.
In July 2023, the U.S. PPI bottomed out and entered passive destocking, and the data in November showed that the U.S. was still in passive destocking. Historically, the duration of passive destocking is generally 2 quarters (no more than 10 months), so the U.S. may be able to switch to active replenishment by the first quarter of this year at the latest, waiting for data verification at the specific time. In November, 6 of the 14 major industries entered the active replenishment. Of course, the sustainability of these industries still needs to be observed, but in the past few months, it was mainly the two upstream industries that have been actively replenishing, which may indicate that the United States is transitioning from passive destocking to active replenishment.
U.S. industry inventory cycle: some upstream and downstream industries may have entered active replenishment, and the midstream as a whole lags behind.
From the perspective of inventory strength, oil, natural gas and consumable fuels have fallen due to oil prices, and inventories of metals and mining, chemicals, household durables, distribution and retail of daily consumer goods, and technical hardware and equipment have all rebounded moderately year-on-year. Judging from the historical quantile of inventory year-on-year, most industries are at a historically low level.
Upstream: The inventory cycle has a clear upward trend.
1) Oil, natural gas and consumable fuels: In July 23, it entered the active replenishment (the petroleum industry is special, only the active destocking and active replenishment stages), and as of November, it was in the active replenishment.
2) Chemicals: In September 23, it entered the active replenishment, and as of November, it was in the active replenishment.
3) Building materials: entered passive destocking in August 23, and was still in passive destocking as of November.
4) Metals and Mining: In July 23, it entered the active replenishment (the metal and mining industry is special, only the active destocking and active replenishment stages exist), and as of November, it was in the active replenishment.
Midstream: The inventory cycle is significantly differentiated, with paper and forestry products, electrical equipment, household appliances and components in passive destocking, transportation or passive destocking, and machinery manufacturing still actively destocking.
1) Paper and forestry products: entered passive destocking in May 23, and was still in passive destocking as of November.
2) Electrical equipment, household appliances and components: entered passive destocking in September 23, and was still in passive destocking as of November.
3) Machinery manufacturing: The inventory cycle has not been switched, and it has been actively destocked since July 22.
4) Transportation: In May 23, from active to passive replenishment, although inventory and sales rebounded year-on-year in November, the transportation industry and most industries sales stabilized to drive the inventory recovery is not consistent, so it is still necessary to observe and make judgments.
Downstream: Household consumer durables, distribution and retail of daily consumer goods, and technical hardware and equipment may have entered active replenishment, while the rest of the industries are still passively destocking.
1) Automobiles and auto parts: July 23 into the passive destocking, although the inventory and sales in November rebounded year-on-year and seemed to enter the active replenishment, but because the auto inventory is at a historical high and there are policy disturbances, it is still possible to continue to destock.
2) Household consumer durables: entered the active replenishment in October 23, and was in the active replenishment as of November.
3) Textiles, clothing and luxury goods: entered passive destocking in May 23, and was still in passive destocking as of November.
4) Food, Beverages and Tobacco: Entered passive destocking in June 23 and is still in passive destocking as of November.
5) Distribution and retail of daily consumer goods: entered the active replenishment in September 23, and was in the active replenishment as of November.
6) Technical hardware and equipment: November 23 or has entered the active replenishment.
Risk Warning:
U.S. economic fundamentals and policies exceeded expectations.