In 2020, the annual production capacity for disposable gloves was 220 billion units. However, demand in that year reached 330 billion. These figures alone illustrate how COVID-19 has disrupted the supply of disposable gloves in just one year!
Let's go back to the three critical phases in the evolution of this state of affairs. First, in quarter one, we had the closure of production sites in China (amounting to 9% of global production) and the transfer of this demand to other producers in Asia leading very quickly to the first round of manufacturing overload.
Then came the second phase with the partial closure of factories in Malaysia (the latter produces 64% of global volumes) contributing to a 50% fall in production capacity right at the time when worldwide demand was exploding. This was particularly felt for medical examination gloves, with the consequence that between January and the end of April 2020 delivery times lengthened to 150 days.
The supply chain was completely overwhelmed and the glove manufacturers were unable to provide a quick solution to the demand that was continuing to grow and far exceeded production capacity.
With the third phase, we see companies implementing measures to protect their staff from COVID-19. Accordingly, demand has continued to increase since June 2020 with no slowdown expected. In addition to an inadequate number of manufacturing facilities has come difficulties in recruiting the necessary workforce and a global shortage of the raw materials. For Acrylonitrile Butadiene, prices have increased inexorably over the past year – on average more than 10% to 20% every month without any signs of a downward trend.
Factories have responded by directing their focus on a massive scale to the thinner gauge and more basic gloves, which require less raw material and are correspondingly more profitable. Unfortunately, the victim of these unfolding events has been speciality gloves for cleanrooms. It is a merciless war that is still being played out in the field of logistics with the increasing adoption of short-term contracts and lead times now extending to 600 days.
For users, sourcing gloves has become a real challenge! Temporary closures of factories in Malaysia since last November have underlined the extreme fragility of the situation. We hope that the pressure will ease with the arrival of vaccines in 2021.
However, with the need for personal protective equipment to be provided for the duration of the vaccination campaigns, demand for gloves is already estimated to reach 396 billion units in 2021 and will grow to 475 billion in 2022. The good news is that manufacturers have already started increasing their production capacity to cope with this continued growth. What is in no doubt is that the pandemic will inevitably have a long-term impact on the glove industry.