Glove sector hit by soft demand and higher costs

PETALING JAYA: The outlook for Malaysia’s rubber gloves sector is not looking very positive at the moment, according to BIMB Securities Research.

In a report, it cautioned that the second half of 2025 (2H25) will likely see flat sales volumes and stagnant average selling prices (ASPs).

“ASPs are expected to show minimal improvement, remaining flat amid global oversupply and persistent price undercutting by Chinese glove manufacturers in non-US markets,” the research house said.

Adding to the pressure, Chinese companies are relocating parts of their production to South-East Asia – Indonesia, Vietnam and Cambodia – to circumvent tariffs while maintaining cost competitiveness.

Given this competitive landscape and weak US demand momentum, the research house said meaningful price recovery appears unlikely.

After frontloading activities by US customers in January and February, BIMB Securities Research said order volumes have since slowed amid inventory buildup.

“Looking ahead to 2H25, we anticipate only a small increase in demand as customers remain cautious amid ongoing tariff uncertainties,” the research house said.

It said minimum wage hikes have raised labour costs, and despite easing natural gas prices, profitability remains fragile.

With that, the research house has maintained its “neutral” call on the sector, citing structural issues and global trade uncertainties, with limited upside catalysts.

“We have a ‘hold’ on Hartalega Holdings Bhd, Kossan Rubber Industries Bhd and Top Glove Corp Bhd and ‘non-rated’ for Supermax Corp Bhd,” it added.