Price war looming for the glove industry
PETALING JAYA: A price war may be on the horizon for the glove industry as Chinese manufacturers accelerate overseas expansion, according to Maybank Investment Bank (Maybank IB) Research.
This spells fresh headwinds for Malaysian glove makers, which account for a significant share of the world's rubber glove supply and are already grappling with a challenging market environment.
'With China players increasingly deploying overseas capacity to penetrate the U.S. market more effectively, the competitive landscape is turning more aggressive, especially after 2025. In our view, a price war is highly likely shaping up an over-supplied gloves market,' Maybank IB said in a report.
According to the research firm, new capacity from a major China glove maker is expected to come online by end-2025.
'We understand that the China glove maker has started marketing to U.S. customers, offering upcoming capacity from its overseas plants in Vietnam and Indonesia at average selling prices (ASPs) of US$16–17 per 1000 pieces (k/pcs) with deliveries starting from November 2025 onwards.
For context, the ASPs of Malaysian glove makers are US$18–19/k pcs.
Maybank IB said while this may be part of the China glove maker's marketing strategy, pricing could still adjust based on demand, tariffs and counter-moves by Malaysian glove makers.
'The latest news nonetheles,s reaffirms our Negative stance on the sector.
'Competition is clearly intensifying, with more capacity from China (targeting non-U.S. markets and its overseas plants focusing on the US market.'
It said although the actual supply and timeline from these overseas plants remain uncertain, any meaningful ramp-up will likely exert pressure on pricing and margins.
'A price war appears increasingly likely, in our view.'
'Separately, we believe the upcoming results (of glove manufacturers) could be weak mainly due to weakening US dollar currency versus the ringgit.'
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