Rough Ride Ahead For Rubber Glove Makers?

Rubber prices climbed to a record high on last week, putting more pressure on the margins of rubber glove manufacturers, which are already grappling with oversupply and normalising demand issues. 

May 2011 delivery contract for the commodity traded on the Tokyo Commodity Exchange rose to RM15.48 per kg on last week. Tyre-grade SMR 20 rubber traded in Malaysia rose to RM14.81 per kg while the price of latex increased to RM9.79 per kg.

Read More >>

Should Investors Exit Malaysia Glove Makers?

Malaysian rubber glove makers are getting used to a slower life after years of scorching growth as demand drops, latex prices soar and the dollar weakens. World’s No.1 glove exporter Top Glove recently said it expects to grow at a meagre 10 per cent in 2011, a far cry from the 50 per cent growth rate it has seen in the last two years.

Shares of Top Glove and its Malaysian peers such as Supermax Corp and Kossan Rubber, have dropped more than 20 per cent since touching all-time highs in July. Same question, will a rising ringgit and high latex prices continue to depress the stocks, or are the low prices a good entry point into the sector?

Read More >>