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"We expect a 15%-20% destock downstream to be necessary this fall and winter to clear the inventory overhang, unless the industry sees a sharp snap-back in demand before the Chinese New Year," said Jefferies analyst, Laurence Alexander.

"Evidence suggests that the customer destock we saw in the second half of 2022 has peaked, hence providing support to apparent steel consumption and steel spread," Chief Executive Aditya Mittal said.

"This tax level will be in place until the end of the year. There will be no better time for a trader holding inventory to sell. Consumers are also incentivised to destock."

As a result, some ranchers may adopt strategies as a bet against droughts like the Tarvers did when they decided to destock, or reduce, 20% of the ranch’s inventory several months ago.

The Durham Ranch also had to destock.