PETALING JAYA: The average selling price (ASP) of gloves is expected to trend lower in the coming months after peaking in May this year as glove prices normalise in line with softer raw material costs.
Kenanga Research said moving into the third quarter, the ASP for nitrile will taper off from US$25 to between US$20 and US$23 per 1,000 pieces.
“Some customers will wait and see since prices are coming off.
“On the contrary, customers that held back purchases during the ASP surge are looking to place their orders.”
Moreover, the research house said glovemakers’ earnings for the second quarter are likely to be stronger than earnings in the first quarter.
This is due to margin expansion from a sudden surge in ASPs to counter the effect of higher raw material input costs.
First-quarter earnings have continued to show gradual improvements, which led to higher margins.
“It’s worth noting that due to the high oil price amidst geopolitical tensions in the Middle East, input raw material nitrile rose more than 50% in the second quarter of financial year 2026,” it noted.
“Hypothetically, a 50% spike would reduce the bottom line by 20%, assuming zero cost pass-through, and ASPs rose between US$26 and US$29 per 1,000 pieces.”
The research house said its top pick is Kossan Rubber Industries Bhd
, as its strategic pivot toward speciality and cleanroom gloves is a step in the right direction.
It estimates that speciality gloves are 60% to 80% higher than generic medical gloves, while cleanroom gloves command three times the premium.
“Backed by a ‘sticky’ customer base due to the mission-critical nature of cleanroom applications where switching costs outweigh potential savings, the group is expanding its cleanroom capacity from 300 million to 400 million pieces per year to 800 million pieces by financial year 2027.”
The research house has downgraded its rating from “overweight” to “neutral” based on the market performance calls for both Hartalega and Top Glove.
