Nitrile Glove Manufacturers See Decline in Margins as Pandemic Fear Fades

The sudden demand for nitrile gloves during the pandemic caused operating profits to soar for major glove producers, but the slowing demand for the gloves is now affecting margins. Nitrile gloves are made of nitrile butadiene rubber, which has excellent chemical resistance and water-resistant properties. The gloves have become a popular alternative to latex gloves as they are completely latex-free and prevent people from having allergic reactions.

Nitrile rubber is one of the major raw materials that go into the production of nitrile gloves, and it plays a critical role in their cost. The price of nitrile rubber was volatile in nature during the past three years, leading to a sudden spike in the price of nitrile gloves, especially during the pandemic. The glove manufacturers saw their operating profits reach over 50% during 2021 and 2022, due to the sudden demand for examination gloves from the medical industry because of COVID-19.

Nitrile gloves are used in various industries, including the medical industry as examination and surgical gloves, the automobile industry for their strength, and the FMCG sector for their chemical-resistant properties. The manufacturing process of nitrile gloves is highly automated and involves dipping ceramic hands in a nitrile rubber mixture, which determines the thickness of the gloves.

The rising price of natural gas is a cause for concern, as it will increase the utility cost and affect the pricing of nitrile gloves. A single glove requires 0.00812 Kwh of electricity and 0.00034 MMBtu of natural gas. Malaysia, one of the largest manufacturers of gloves, saw a 24% increase in the price of natural gas, which will affect the prices of nitrile gloves by around 1% to 1.5% of the production cost.

The usage of nitrile gloves is high across the USA and Europe, whereas the usage of nitrile gloves across Africa, Asia, and South America accounts for just 1/5th of the total consumption worldwide. The demand for nitrile gloves from these regions is expected to increase, creating more opportunities for glove manufacturers and helping to stabilize prices.

As the fear of the pandemic fades, the demand for nitrile gloves has slowed down, affecting the margins of manufacturers. The nitrile rubber prices is expected to reduce in the coming quarter, which will nullify the natural gas price rise, and the supply-demand gap is expected to be reduced. However, Chinese manufacturers are pushing low-priced gloves into the market, which is worsening the financials of Malaysian glove makers who saw 50% margins during the peak of COVID-19. Customers can bargain with their suppliers to offer reduced prices as the market is becoming more competitive, but the supply-demand gap is expected to take a few more months to fulfill.

FAQ

1. How big is the Nitrile glove market?

As of September 2021, the global nitrile glove market was around USD 6.8 billion in 2020. From 2021 to 2028, the market is projected to reach USD 14.8 billion, growing at a CAGR of 10.3%. However, market data is subject to change based on supply and demand, economic conditions, and other factors.

Source: https://straitsresearch.com/report/nitrile-gloves-market

https://www.bloomberg.com/press-releases/2022-01-12/at-14-34-cagr-nitrile-gloves-market-size-is-expected-to-reach-usd-14-08-billion-globally-by-2028-says-brandessence-market

2. Nitrile gloves are use mostly by which industries?

Nitrile gloves are used in various industries for their superior chemical resistance, durability, and flexibility. Some of the industries that use the most nitrile gloves include:

1. Healthcare

2. Food

3. Manufacturing

4. Janitorial and sanitation

3. What is the market forecast for nitrile gloves?

The global nitrile gloves market is projected to grow at a compound annual growth rate (CAGR) of around 10.3% from 2021 to 2028, reaching a market size of USD 14.8 billion by 2028. Various factors, such as increasing concerns about hygiene and safety in healthcare and other industries, drive demand for nitrile gloves.

However, it is important to note that market forecasts are subject to change based on various factors, such as changes in consumer behavior, fluctuations in raw material prices, and the emergence of new technologies. Additionally, the COVID-19 pandemic has created a significant disruption in the supply chain of nitrile gloves, leading to shortages and price fluctuations, which may also impact the market forecast in the near term.

Source: https://www.stratviewresearch.com/1210/nitrile-gloves-market.html

4. Why are nitrile glove prices increasing? 

The prices of nitrile gloves are increasing due to increased demand in healthcare and other industries, supply chain disruptions caused by the COVID-19 pandemic, rising production costs, and changes in trade policies. The surge in demand has led to shortages and price increases, while disruptions in the supply chain have caused delays and limited supply. Production costs have risen due to the increased costs of raw materials, energy, transportation, and labor, and changes in trade policies have also impacted prices.

5. Is nitrile more expensive than latex?

Yes, nitrile gloves are generally more expensive than latex gloves. The higher cost of nitrile gloves is primarily due to the higher cost of the raw materials used to make them. Nitrile gloves are made from synthetic rubber derived from petroleum, whereas latex gloves are made from natural rubber, a renewable resource. 

6. What is the raw material for nitrile gloves?

The raw material used to make nitrile gloves is nitrile butadiene rubber (NBR), a synthetic rubber that combines acrylonitrile and butadiene. The resulting polymer has excellent resistance to chemicals, oils, and solvents and high puncture resistance, making it an ideal material for making gloves. 

The manufacturing process involves mixing the nitrile rubber with other additives and processing aids, then molding and curing the material to form gloves in various sizes and thicknesses.