Thanks to COVID-19, prices for personal protective equipment, especially disposable gloves, have been on the rise as supply suffers acute shortages. In many cases, price jumps have been astronomical, and in the next 45 to 90 days, prices for all gloves will likely double. PVC prices may go even higher, delivering a serious blow to the affordability of vinyl gloves.
In simplest terms, it is a matter of overwhelming demand and a supply chain that cannot keep up. Disposable gloves have for years been viewed as a basic commodity that is widely available, but for many reasons, there has always been a limited manufacturing capacity. Glove makers and the supply chain were not prepared to deal with the sudden spike in demand.
Even under normal conditions, manufacturing capacity across the disposable glove industry can increase by only 10% to 15% per year. The easiest way to do that is to add production lines. A modern disposable glove line can produce up to 300 million gloves annually, which may sound like a lot. But adding even 1,000 lines would increase the overall yearly capacity by only 20% to 25%, cost billions in infrastructure investment, and require 6 to 12 months to set up.
And here’s the big ‘if’
All of that is assuming, of course, that one has the labor and raw materials to actually run those production lines.
Prices for latex, nitrile (synthetic rubber), and PVC are rapidly rising. Some factories are running at limited capacity because they lack enough raw materials. Just as no one planned to instantly make double the amount of gloves, no one planned to double the amount of nitrile butadiene rubber or latex or vinyl.
Some may wonder why, with oil prices at all-time lows, there isn’t more nitrile available. To begin with, there are few companies in the world that make synthetic rubber—and you do not just pump oil from the ground and watch as it magically becomes disposable gloves.
In time, all of that will pivot, but disposable glove companies are not built to react dynamically or chase trends. They manufacture a steady stream of gloves and cannot be quickly scaled.
Change is the guiding principle
The only certainty in the disposable glove business is that change is coming. If you are a distributor, think long term. Pay attention to your pricing. Pay attention to market conditions. Look for pockets of end-users who perhaps did not exist before COVID-19 but will have needs moving forward.
The days ahead will be volatile, and that volatility will take months to play out. How much? How long? We don’t have all the answers. What we do know is that we will provide ongoing updates, so check back on this blog and stay in touch with your AMMEX sales rep.
Over 30-plus years, AMMEX has perfected the tools and programs that assist our partners in growing their disposable glove revenue. Find out more.