‘Gloves demand, ASPs likely to remain elevated in 2021’

Ex-factory prices are expected to grow by 30 per cent to 40 per cent in third quarter of current year 2020 (3QCY20) compared to 2QCY20. MIDF Research

KUALA LUMPUR: Gloves demand and average selling prices (ASPs) have been projected to remain elevated in 2021, with analysts anticipating higher highs in the upcoming quarters.

Based on channel checks by the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), supply for medical gloves remains tight and ASPs are still in an upward trajectory a er the jump seen earlier in the first half of the year.

“Ex-factory prices are expected to grow by 30 per cent to 40 per cent in third quarter of current year 2020 (3QCY20) compared to 2QCY20,” MIDF Research said in its gloves sector update.

“Following that, there may be another increase of 40 per cent to 50 per cent in 4QCY20.

“As such, the glove makers are likely to beat their own records seen in the last quarter in the upcoming two quarters.”

MIDF Research gathered that the number of new Covid19 cases has surpassed 400,000 globally even before the Northern Hemisphere enters winter.

The research arm highlighted that the surge in number of cases globally means that the curve has not been fla ened.

“This occurs as most economies reopened from strict lockdowns. The number of new daily cases may continue to remain high as economies cannot afford another round of total lockdown.

“In order to curb further spreading, mass testing is expected to continue and that will increase the use of medical gloves.

“Gloves will also be used as a protective and preventive gear.”

The research arm expected that ASPs are likely to remain high in financial year 2021 (FY21) based on a base-case scenario of vaccine availability in mid-2021.

It also noted that the administration of vaccines will also require the usage of gloves.

MIDF Research believed that demand for gloves to remain high into 2022 due to the organic growth of the industry, coupled to higher hygiene awareness.

“Since the pandemic, the demand for rubber gloves is expected to growth at a pace of over 20 per cent from about 10 per cent previously.

“Topping that, wider adoption of glove usages from industries government agencies as well as services industry such as beauty and grooming.

“The growth in demand is due to the change in hygiene habits as well as an expected increase in gloves used per capita among the developing nations.”

Overall, MIDF Research reiterated that ASPs are still on the upward trend and with the unabatingly high daily global cases of Covid-19, demand and ASPs are well supported.