PETALING JAYA: The local rubber glove industry is entering the second half of 2026 (2H26) from its strongest position since the post-pandemic downturn, according to BIMB Research.
In its outlook for 2H26, the research house said the industry has largely moved past the prolonged destocking cycle, underpinned by improving utilisation rates, more stable average selling prices (ASPs), and widening US- China tariff differentials.
Global glove demand is projected to rise from 421 billion pieces in 2025 to 455 billion in 2026, before reaching 530 billion by 2028, implying a healthy three-year compound annual growth rate of about 8%.
But while the earnings recovery is becoming increasingly visible, the research house said investors should avoid extrapolating this into another supercycle.
“The industry is recovering from an exceptionally depressed base, not entering another Covid-era shortage.
“Excess capacity remains elevated, and Chinese competition outside the United States continues to cap pricing power, hence the sector is not yet ready for a broad re-rating.”
It noted that ordering patterns have now become more consistent. This has translated into better utilisation rates of around 80% to 90% among leading Malaysian producers, versus 60% to 70% a year ago.
BIMB Research said this matters because glove manufacturing is a high fixed-cost business, where every incremental utilisation gain disproportionately boosts earnings through stronger operating leverage.
“Nonetheless, the current momentum is more about restocking, not a demand boom, and growth should moderate towards historical levels beyond 2026.”
Also, ASPs have improved substantially from the trough levels. US-bound Malaysian nitrile gloves are currently transacting at the mid-to-high US$20 per 1,000 pieces range, compared with the sub-US$18 levels during the depths of the downturn.
“Recent disruptions in nitrile butadiene rubber (NBR) supply provided a temporary window for manufacturers to pass through higher costs, supporting the ASP recovery.
“However, this should not be mistaken for genuine pricing power. As NBR prices begin to normalise from recent peaks, buyers are likely to revisit pricing negotiations, limiting further ASP upside.”
As a result, it expects 2H26 ASPs to remain broadly stable and unlikely to act as a major earnings accelerator. It said recent earnings upgrades were partially supported by manufacturers’ ability to pass through higher raw material costs, particularly following the sharp spike in NBR prices earlier this year.
Historically, it said glove buyers have been quick to demand pricing concessions whenever feedstock costs decline.
