Due to changes in energy costs and raw material pricing, disposable glove prices will definitely see price adjustments in early 2017.
Volatile global markets have widespread implications for manufacturing organizations. Rising energy costs and unexpected fluctuations in raw material price levels have direct effects on the global disposable glove market in the form of increased prices for the end user.
As reported in various news outlets, the past 8 weeks have exhibited extreme movements in raw materials cost. For example, the cost of raw latex has increased by 43%. The main components used in the manufacturing of nitrile gloves, acrylonitrile and butadiene rubber, saw an increase of 41%.
In addition to rising raw material costs, energy used in the production of disposable gloves has increased. Coal, the primary energy source used in the production of vinyl gloves increased by 16%.
Aside from the pricing of raw materials and energy sources, transportation costs play a significant role in the final expense of disposable gloves. The Shanghai Containerized Freight Index, which is the standard indicator for the cost to transport containers from Asia to North America, saw a blended increase of 49% for east and west coast shipments, over the past 8 weeks.
Lastly, governmental intervention related to pollution control in Northern China and flooding in parts of Southern China delayed the shipment of a significant volume of vinyl gloves out of China for over two months during the period Dec 2016 through Jan 2017. This is also coupled with the Chinese New Year celebrations that began Jan 28th and ends Feb 15th. Disposable glove factories generally reduce production during the Chinese New year period. Due to these mitigating factors there may be some periodic shortages of vinyl gloves through the second quarter of 2017.
Sempermed is monitoring the situation closely and will be happy to be your information resource for helping you interpret the supply chain and financial implications of the rapidly changing landscape.