Saudi Aramco27 said on the 27th that it planned to acquire 24.6 billion yuanRongshengPetrochemical 10% of the shares.
Everyone in Rongsheng Petrochemical Textile knows that it is the leader in polyester, and many companies also buy its silk. Everyone has also heard about Saudi Aramco, and the Middle East tycoon is one of the richest.
What impact will the cooperation between the two of them have on the polyester and downstream markets?
First of all, the most intuitive thing is the price of raw materials.
I don’t know if you have ever heard about computer accessories such as memory and hard drives before. A few years ago, news about fires broke out from major overseas manufacturers every day, followed by price increases. But when Chinese companies can also make memory themselves , hard drives, and coincidentally, these factories suddenly stopped catching fire, and the prices also came down. Therefore, there are also jokes that China does not make memory and hard drives, but “fire extinguishers.”
Although China’s textile industry has developed rapidly, for a long time, the upstream raw materials depended on the expression of overseas chemical giants. The most impressive thing was the time in 2018 /span>PXThe surge triggered a series of chain reactions, which directly or indirectly led to the continued downturn in the market in the following years.
Saudi Arabia cooperates more with China, and the supply of upstream raw materials is guaranteed, which can act as a “fire extinguisher” to a certain extent. For textile companies, the probability of raw materials rising and falling in the short term is greatly reduced.
Secondly, going a little deeper, it is related to the industrial structure.
In recent years, domestic polyester leaders have built their own refining and chemical integration projects, striving to open up the entire industry chain “from a drop of oil to a piece of cloth”. If we extend the entire timeline, we can find that China’s polyester faucets started from filament and rolled upstream step by step. They rolled domestically at first. When the domestic rolling reached a certain level, they began to roll with foreign chemical giants. The equipment is also becoming more and more high-end, and now they are beginning to build the most advanced refining and chemical integration projects.
At this stage, Saudi Arabia’s crude oil is also involved with Russian crude oil to some extent. After all, after the Russo-Ukrainian war, Russia’s original largest market, the European Union, began to “go to Russia” in terms of energy. How can it satisfy such a large market? There are only emerging developing countries with large populations such as China and India. Since the United States became a crude oil exporter, the Chinese market has also been very important to Saudi Arabia. Therefore, the entry of Saudi capital can be regarded as a continuation of the involution to a certain extent, involving crude oil, the most upstream of the industrial chain. To a certain extent, it is also a win-win situation. Saudi Arabia has won a stable market, and China has won energy security.
Finally, it reflects the changes in the current international environment.
Since the beginning of this year, there has been an endless stream of news about the internationalization of the RMB. Recently,China and France completed the first transaction inRMBThe news that settled LNG transactionsand trade between China and Brazil can be settled in local currencies, while rumors of Saudi Arabia’s crude oil being settled in RMB have also been circulating for a long time. There is no other way. It is too ugly to see the Federal Reserve raising interest rates to reap the consequences. In the past, we had no choice but to accept our fate and suffer losses. Now we have a choice, and of course we want to be a good person.
For a major manufacturing country like China, the two most troublesome things are raw materials and the market, and currency is the medium for interconnection. This year, many textile people said that foreign trade has shrunk significantly, and because of the uncertainty of global politics, they lack confidence for the future. They are afraid that one day an executive order will be issued for political reasons and they will no longer do business with you. But we can’t close ourselves off because of fear. We still have to go out, but our strategies and directions may need to be changed.
History has also proven that unilateral appeasement will only make the other party worse, and more importantly…You have to rely on your own strength. There is no need to specifically replace the US dollar, as long as it provides other countries with a backup option when the Fed harvests.
</p
