Nitrile Glove Industry: Market Fluctuations and Opportunities Coexist with a 55% Utilization Rate Target in 2024

With the improvement of market demand, the average capacity utilization rate of China's disposable nitrile glove manufacturing industry has shown a steady upward trend. Specifically, the average capacity utilization rate of the production line in July has increased to 52.00%, which directly promoted the growth of demand for the main raw material nitrile latex, and then encouraged latex enterprises to actively investigate and accelerate shipments. By the end of July, despite an increase in cost prices, market demand orders remained stable, and nitrile latex companies actively undertook orders and expanded production, resulting in a small range of transaction prices loosened.

From the perspective of production capacity development, it is expected that from 2023 to 2024, the production capacity of China's disposable nitrile glove manufacturing industry will continue to increase, from about 3.2 million kg to about 3.6 million kg, which clearly indicates that the industry is in the stage of continuous expansion of production capacity. At the same time, in terms of capacity utilization, the industry as a whole maintains a level of about 50%, and is accompanied by certain fluctuations. In particular, at the beginning of 2023, capacity utilization declined slightly, but it has gradually picked up since the middle of the term and is expected to reach a level of about 55% by mid-2024, which reflects the overall stability of capacity utilization in the industry.

China's disposable nitrile glove manufacturing industry is in a stage of steady development, production capacity continues to increase, while the utilization rate also remains at a high level, which fully reflects the continued growth of China's demand for disposable medical gloves. This trend provides valuable reference information for relevant companies and investors, revealing the industry's capacity and utilization in the next year and more.

However, it is worth noting that although the orders and construction of China's nitrile glove industry in the first half of 2024 continue to show a steady trend of recovery, but by the impact of multiple adverse factors including 301 tariff announcement, raw material nitrile latex price rise and a substantial increase in sea freight, upstream and downstream enterprises in the second half of the market confidence is generally insufficient. The market is in a wait-and-see mood. In spite of this, during the period of July to August, import and export traders and overseas end users are still positive about the purchase intention of nitrile gloves, and many small and medium-sized nitrile glove enterprises actively visit overseas customers and participate in exhibitions to strive for more order cooperation opportunities. The head enterprise is to maintain a high operating rate, and the capacity utilization rate continues to maintain a high of 8-90%. As of August 8, the capacity utilization rate of disposable nitrile gloves in China has reached 54.00%, an increase of 0.31% from last week, showing that the utilization rate of the production line is still continuing to improve slightly.

In addition, the fluctuation of crude oil prices has also had a significant impact on the nitrile latex industry chain. Since the outbreak of the epidemic in early 2020, oil prices have experienced a sharp decline followed by a gradual recovery, reaching a high of $120 per barrel by mid-2022. However, since the second half of 2022, oil prices have experienced a volatile decline and have recently fallen back to levels close to $60 / BBL. This change has directly led to fluctuations in the cost of nitrile latex and market prices, and the overall trend is closely related to oil prices. Although the profit of nitrile latex is relatively stable, fluctuating between $200 and $400 / ton, its cost and price are still deeply affected by the trend of international crude oil.

Specific to the middle and late July, due to the increase in the supply of butadiene products, the main raw material of nitrile latex, but weak demand, the market price continued to fall. As of August 7, the delivery price of Shandong Luzhong has been reduced to about 12,550 yuan/ton, while the price of self-picking from the main port in East China is about 12,200 yuan/ton. This trend of cost reduction has made the nitrile latex industry with inverted profits in the early period finally realize a turnaround. Although the company's offer is still relatively strong after the cost has fallen, the real price has made a small profit, and the product profit has recovered to the level of profit space since July 26. As of August 7, the theoretical cost profit of nitrile latex for labor insurance has reached 155 yuan/ton, and the market trading atmosphere is more active.

In the long term, since the beginning of 2020, the cost and price of nitrile latex have shown an upward trend. The cost line rose from about 4800 yuan/ton to about 6400 yuan/ton in June 2024, an increase of more than 30%; The price line rose from about 5,000 yuan/ton to about 6,700 yuan/ton, the same significant increase. Although there has been a certain degree of volatility and decline in the price line since the second half of 2022, it has generally remained at a high level. While the cost line is relatively more stable, the overall increase is small.

With the decline in market prices such as butadiene and acrylonitrile on the cost side, nitrile latex enterprises actively schedule incremental orders after the recovery of profits, resulting in an increase in the total supply of the industry. However, this has also made individual small and medium-sized enterprises offer signs of loosening, which has led to a slight decline in market transaction prices. As of August 8, the reference price range of nitrile latex for labor protection gloves is between 6200 and 6450 yuan/ton; The reference price range of nitrile latex for disposable gloves is between 6450 and 6600 yuan/ton. Despite the loosening of market prices, downstream nitrile glove companies are still actively accepting orders to meet market demand. Due to the wide application of disposable nitrile gloves, especially in the medical, food processing and industrial fields, the demand continues to grow, making the demand for raw materials for nitrile glove manufacturing enterprises remain strong.

In this context, nitrile latex manufacturers have increased investment in research and development to improve product quality and production efficiency. Some enterprises have begun to adopt advanced production technologies, such as automated production lines and environmentally friendly processes, to reduce production costs and improve market competitiveness. In addition, some enterprises also pay attention to brand building and market expansion, and further expand market share by participating in China exhibitions and strengthening cooperation with downstream customers.

However, despite the strong market demand, the nitrile latex industry still faces some challenges. For example, the increasingly strict environmental regulations make enterprises need to invest more environmental protection facilities and resources in the production process, increasing production costs. In addition, international trade frictions and geopolitical risks also bring uncertainty to the supply of raw materials and product exports.

In order to meet these challenges, nitrile latex companies began to seek diversified development strategies. Some companies are beginning to explore alternative raw materials to reduce their dependence on traditional raw materials. At the same time, enterprises are also strengthening cooperation with the upstream and downstream industry chains to improve the overall anti-risk ability.

As the global demand for disposable nitrile gloves continues to grow, China's nitrile latex industry is expected to continue to maintain a steady development trend. However, enterprises need to pay close attention to market changes and flexibly adjust production strategies to cope with the changing market environment. At the same time, strengthening technological innovation and environmental protection investment, improving product quality and production efficiency, will become the key to the sustainable development of enterprises.