WITH China players increasingly deploying overseas capacity to penetrate the US market more effectively, the competitive landscape is turning more aggressive, especially after 2025.
“In our view, a price war is highly likely shaping up an over-supplied gloves market,” said Maybank Investment Bank (MIB) in a recent report.
Separately, MIB believes upcoming results could be weak mainly due to weakening USD currency vs MYR. MIB reiterates their negative stance on the Malaysia glove sector.
Latest industry sources suggest that competition in the glove sector is set to intensify further, with new capacity from a major China glove maker, expected to come online by the end of 2025.
MIB understands that the China glove maker has started marketing to US customers, offering upcoming capacity from its overseas plants in Vietnam and Indonesia at average selling prices of USD16–17/k pcs, versus Malaysia glove makers’ current average selling price of USD18–19/k pcs, with deliveries starting from Nov 2025 onwards.
Additionally, the company’s Indonesia plant is likely to be operational by end-2025 or early 2026, which is earlier than MIB’s initial expectation of the second half of 2026.
While this may be part of the China glove maker’s marketing strategy, pricing could still adjust based on demand, tariffs and counter-moves by Malaysia glove makers.
“The latest news nonetheless reaffirms our negative stance on the sector,” said MIB.
Competition is clearly intensifying, with more capacity from China, targeting non-US markets, and its overseas plants, focusing on the US market.
Although the actual supply timeline from these overseas plants remain uncertain, any meaningful ramp-up will likely exert pressure on pricing and margins.
A price war appears increasingly likely, in MIB’s view. That said, a key upside risk to our call would be a shift in US trade policy particularly if the Trump administration finalises higher tariffs on gloves from Vietnam, Indonesia and Thailand while maintaining lower tariffs for Malaysia.
Such a move would restore Malaysia’s cost competitiveness in the US market and partially offset the structural headwinds facing the sector. —June 13, 2025
Main image: Business Times
