This article first appeared in Capital, The Edge Malaysia Weekly on May 11, 2026 - May 17, 2026

GLOVE counters have enjoyed a share price run-up since the outbreak of war in the Middle East at end-February, as investors responded to prospects of higher average selling prices (ASPs) amid pricier crude oil and tighter supply.

Glove manufacturers rely on crude oil by-products for raw materials and the expectations of potential front-loading of sales amid concerns over supply shortages had fuelled the rally, CIMB Research said in a report dated April 1.

Some say the rally will be short-lived, however, once geopolitical tensions in the Middle East ease and raw material prices normalise.

Others believe the sector’s outlook could shift, depending on how transitory the impact is on the availability of chemical by-products and how this affects future supply as smaller players exit the industry. This raises the question of whether supply-demand equilibrium could arrive earlier than anticipated.

Intense competition in the sector, coupled with rising raw material costs, has resulted in early casualties. A recent case was WRP Asia Pacific, whose closure was accelerated by disruptions in global energy and petrochemical supply chains.

MSBS Bank Research, in a sector report dated April 27, said the closure of smaller factories would help reduce local oversupply and rebalance the supply-demand dynamic towards a more stable pre-pandemic level.

An analyst at a research house believes it is possible that the equilibrium for the sector could be reached earlier than his estimate of late 2028 or 2029, based on the slower increase in supply in the overall market.

“Based on the three main Chinese manufacturers’ recently released 2025 annual reports, their expansion plans have been less aggressive than I had estimated. There were increases, but not as much as I had earlier expected,” he notes.

The three largest listed Chinese glove manufacturers are Intco Medical Technology Co Ltd, Blue Sail Medical Co Ltd and Zhonghong Pulin Medical Products Co Ltd. Of the three, Intco Medical has the largest nitrile glove capacity at 70 billion pieces in 2025. Blue Sail’s capacity stands at 24 billion pieces, while Zhonghong’s is 26 billion, covering both nitrile and PVC protective gloves.

By comparison, Hartalega Holdings Bhd (KL:HARTA), the largest nitrile glove producer in Malaysia, has a production capacity of 27 billion pieces, which is expected to rise to 30 billion by end-2027. Top Glove Corp Bhd (KL:TOPGLOV), which produces mainly latex gloves, has an annual production capacity of 95 billion pieces.

But there are others who are more subdued on the outlook, anticipating that the supply glut will linger in the near term.

CIMB Research analyst Oong Chun Sung says: “We do not expect the market to reach equilibrium for at least the next two years. Despite concerns over raw material supply constraints, glovemakers have not observed any panic buying, as customers are adopting a wait-and-see approach — especially after key input costs (nitrile butadiene rubber latex prices) normalised by more than 20%, following the US-Iran ceasefire.”

Oong remains neutral on the sector, as he sees no long-term cata­lysts for now.

“The industry is still [flush] with ample supply capacity after several manufacturing lines were hibernated last year (estimated at at least 40 billion units of capacity in Malaysia), on top of ongoing construction works in other parts of Southeast Asia (estimated at an additional 30 billion to 50 billion units),” he says.

Given Hartalega’s estimated global glove demand of 330 billion pieces in 2026 and 349 billion in 2027, and his in-house estimate of industry supply capacity at 418 billion and 429 billion respectively, Oong believes the industry remains in oversupply at this juncture.

The cost of butadiene, a key raw material in the production of nitrile gloves, has risen about 60% since the start of the war. In response, Chinese glove manufacturers adjusted their ASPs upwards, prompting Malaysian glove players to quickly follow suit.

The ASP of Malaysian nitrile gloves is US$29 per 1,000 pieces, versus US$17 per 1,000 pieces before the war. Meanwhile, Malaysian latex glove ASPs have also risen, albeit by a smaller margin, at around US$24 per 1,000 pieces compared with US$20 previously.

For Chinese glove producers, the current blended ASP is US$27 to US$28 per 1,000 pieces, implying that the gap has narrowed between producers.

An analyst notes that US tariffs on Chinese gloves have given Malaysian manufacturers a leg-up in the US market. MBSB Research points out that the 120% US import tariff on Chinese gloves has made Malaysian gloves cheaper by 30% to 40% per 1,000 pieces in the US.

Another analyst believes that, instead of ASP movements, what is equally important to consider is glovemakers’ margins.

“We should look out for margin expansion in the upcoming quarters to see whether the glovemakers have managed to improve their margins,” he says.

Hartalega, which released its financial results for the fourth quarter ended March 31, 2026 (4QFY2026) last week, reported a net profit of RM40.47 million against revenue of RM515.24 million, bringing FY2026 net profit to RM103.02 million on revenue of RM2.15 billion. Net profit margin improved to 4.8% in FY2026 from 2.9% in FY2025.

On a quarterly basis, it marks the third consecutive quarter of net profit margin improvement for the group — rising from 3.4% in 2QFY2026 to 6% in 3QFY2026 and 7.9% in 4QFY2026.

CGS International Securities says in its report dated May 6 that the improved production efficiencies from ongoing automation projects overcame lower ASPs for the quarter, leading to an improved EBIT (earnings before interest and taxes) of US$1.30 per 1,000 pieces in 4QFY2026 compared to 30 US cents in 4QFY2025.

Top Glove, whose financial year end is Aug 31, reported a RM30.75 million net profit for 2QFY2026 ended Feb 28 on reve­nue of RM1 billion. This puts its net profit margin at 3.1% for the quarter.

Meanwhile, Kossan Rubber Indus­tries Bhd (KL:KOSSAN) reported a net profit of RM151.3 million for the financial year ended Dec 31, 2025 (FY2025) on revenue of RM1.75 billion. Net profit margin for FY2025 stood at 8.7%, up from 6.2% in the previous year.

Supermax Corp Bhd (KL:SUPERMX), the smallest of the four main glovemakers on Bursa Malaysia, has been loss-making since FY2023 and reported a net loss of RM58.44 million for 2QFY2026 ended Dec 31, 2025, on revenue of RM187.44 million.

Of the four, Hartalega has seen the biggest improvement in its share price since the start of March, gaining some 33% to close at RM1.18 last Thursday and putting its market capitalisation at RM3.8 billion.

Top Glove came in next with a gain of 28.6% in the same period. It closed at 72 sen last Thursday, valuing the company at RM5.8 billion.

Kossan has seen its share price gain 16% from 98 sen on March 2 to RM1.13 last Thursday. The company has a market cap of RM2.88 billion.

Loss-making Supermax also made gains in its share price, improving 16% from 27 sen at the start of March to its close of 31.5 sen last Thursday. The company has a market cap of RM973 million.

With a peace deal in the Middle East appearing to take shape at the time of writing, it remains to be seen how it will affect raw material supply and prices.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.