Chinese manufacturers are lowering prices to capture the market, and glove stocks continue to be under pressure.
(Kuala Lumpur, 13th) Chinese glove manufacturers are setting up factories overseas, starting production early and slashing prices to seize the U.S. market, intensifying competition and raising the risk of price wars, which is further suppressing the prospects of the local glove industry.
The investment bank research of Bank Malaysia pointed out in its latest report that, according to industry news, some Chinese glove manufacturers have begun to market their new overseas factory capacities located in Vietnam and Indonesia to U.S. customers, with deliveries expected to start from November 2025.
The average selling price (ASP) quoted by Chinese glove manufacturers is $16 to $17 per thousand gloves, lower than the current price of Malaysian glove factories, which is $18 to $19 per thousand gloves.
In addition, the production commencement of the manufacturer's Indonesian factory is also faster than expected, potentially starting operations by the end of 2025 or early 2026, while the initial expectation was for production to begin in the second half of 2026.
"Although this may just be a marketing tactic by Chinese manufacturers, actual prices will still adjust according to demand, tariffs, or the response strategies of Malaysian manufacturers, but the above news further confirms our negative view on the industry."
Because, whether it is new capacity from China entering non-U.S. markets or its overseas factories targeting the U.S. market, industry competition has become fierce.
A price war has erupted.
Analysts believe that the price war in the glove Industry is likely to exacerbate the problem of oversupply.
Additionally, due to the weakening of the US dollar against the Malaysian ringgit Exchange Rates, we expect that the upcoming performance reports may not be ideal.
However, analysts also point out that changes in US trade policy could be an upside risk that might alter the Industry landscape.
Can tariff policy break the deadlock?
If the Trump administration implements higher tariffs on gloves from Vietnam, Indonesia, and Thailand while maintaining lower tariffs on Malaysian gloves, it could restore the cost competitiveness of Malaysian gloves in the US market, partially mitigating the current structural challenges.
However, until the policies become clearer, analysts maintain a negative outlook on the glove Industry.
At the same time, reaffirming the outlook for Top Glove. $HARTA (5168.MY)$ The "Sell" rating of the high-yield product industry. $KOSSAN (7153.MY)$ and Top Glove. $TOPGLOV (7113.MY)$ of the "Sell" rating.
Source: Nanyang Siang Pau
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