TOP GLOVE MAY BENEFIT FROM LOWER LATEX PRICES AMID GEOPOLITICAL CONFLICT

KUALA LUMPUR, April 1 (Bernama) -- Glove manufacturers with higher exposure to natural latex (NL) gloves could benefit temporarily amid the West Asia conflict as customers seek cheaper substitutes for nitrile butadiene rubber (NBR) gloves.

In a research note, CIMB Securities said Top Glove Corp stands out as a clear beneficiary of this substitution play, given that NL gloves account for over 36 per cent of its total sales volume during the first half of its financial year 2026.

It said global glovemakers plan to raise the average selling prices (ASPs) by US$7- US$9 per 1,000 pieces for NBR gloves and by US$3 per 1,000 pieces for NL gloves starting Apr 2026.

Following the ASP revisions, Malaysia’s blended ASP is expected to be US$27– US$29 per 1,000 pieces, higher than China’s US$23– US$24 per 1,000 pieces, albeit with a narrower range.

“Prices of key inputs for glove makers, particularly acrylonitrile and butadiene, have surged over 59-100 per cent since the West Asia conflict began in late Feb 2026.

“The closure of the Strait of Hormuz disrupted the supply of chemical derivatives produced from crude oil, prompting the Malaysian Rubber Glove Manufacturers Association to call for government intervention to address the resulting NBR latex shortage,” it said.

Meanwhile, CIMB Securities noted that NL prices rose by 10 per cent, despite being relatively unaffected by the conflict.

Based on its channel checks, glove manufacturers’ inventory levels across Malaysia, Thailand, and China appear to be at critical lows, currently hovering around one to two months (including finished goods and goods in transit).

The industry could therefore face a supply crunch should the United States-Iran conflict drag on.

“Under such conditions, glovemakers with integrated supply chains may be better positioned to weather the headwinds,” it added.

It said Top Glove’s manufacturing operations in Thailand may also provide the group an advantage, as its Thai plants can source locally harvested natural latex, helping to support supply chain stability.

Overall, CIMB Securities maintained a “neutral” call for Top Glove, with a target price of 63 sen.

-- BERNAMA