Cathay Pacific Haitong: Rebalancing regional supply and demand in the industry, a new competition cycle for medical gloves begins
The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that the prices of medical gloves in China and the US are inverted, and the industry will first enter into a rebalance between regional supply and demand. As external disturbances subsided and regional supply and demand were rebalanced, the industry gradually entered a new competitive pattern. The bank expects supply chain efficiency and comprehensive cost control capabilities to remain the main line in the future, while the expansion of overseas production capacity by Chinese manufacturers is a new variable in the global landscape.
Cathay Pacific Haitong's main views are as follows:
US imports: volume increases and prices decrease, competitive environment is driven by the core price
1) Volume: The US continued to grow and did not decline as planned. The March 2026 conflict between the US and Iran caused a tight supply of petrochemical raw materials, and the supply of nitrile latex, the core raw material for nitrile gloves in Southeast Asia, also clearly contracted, and the market actively interpreted the logic of the supply gap. However, judging from the import data of the US, the core consumer market for nitrile gloves, whether in April or May alone, or the combined calculation for April and May, the import volume increased. 2) Price: The price of raw materials is high, while the average import price is historically low. Prices of raw materials such as butadiene rose markedly after the conflict between the US and Iran, and there is a shortage of materials such as nitrile latex, so the price of nitrile gloves should be fully conveyed. However, US customs import data shows that the unit price of US medical gloves imported from April to May 2026 was low in the past few years, and lower than the situation when raw material prices were low in the same period in 25 years.
China's exports: volume and price have risen sharply, transmission mechanism is smooth
1) Volume: In the second quarter, China's exports reached a record high in 22 years. As the impact of the sharp decline in US exports continues to be digested, the growth rate of China's medical gloves exports has bottomed out and rebounded since November 2025, and has maintained positive growth since 2026, and has benefited from rising export volume growth after supply disturbances in external markets. 2) Differences in the competitive landscape determine that there is a significant difference between Chinese export prices and US imports. The average export price of medical gloves in China rose significantly in the second quarter of 2026. The main reason is that domestic medical glove exports, on the one hand, were not high overall profit levels after being overspent by the industry during the epidemic, compounding the sharp decline in exports to the US in 2025, increasing the pressure on supply and demand. As a result, domestic medical glove production capacity is actually in the process of gradual contraction, and the industry is more motivated to increase prices and improve profits.
Prices of medical gloves in China and the US are inverted, and the industry will first enter into a rebalance between regional supply and demand
Affected by the differences in supply between the US and the non-US markets mentioned above, in May 2026, the average price of medical gloves exported by China to non-US markets exceeded the average price of US imports, and there was a rare price reversal. This will inevitably enable Southeast Asian manufacturers that can export to the non-US market to increase their sales ratio to the African and US regions to improve capacity while mitigating the current situation of rapid export supply expansion to the US. This will boost the average price of US imports and put downward pressure on the average price of Chinese exports.
Considering that the industry's capacity utilization rate continues to be low and the supply side is still flexible, the cost curve is a key variable
Take Top Glove, the largest glove manufacturer in Malaysia, as an example. In fiscal year 2025, it had an installed production capacity of 95 billion units and an operating capacity utilization rate of only 50%-70%. Other Malaysian and Thai glove manufacturers are in a similar situation. Therefore, when market prices and profits are high, some idle production capacity will be put into production, which suppresses prices, thus appropriately squeezing market prices and controlling industry supply. This may be the main competitive strategy of future industry leaders.
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