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High natural rubber prices have curbed global demand for rubber gloves and prompted users to shift to cheaper synthethic ones, an industry official said on Thursday.
Natural rubber glove sales growth has slowed in the past two years as hospitals and the food industry have used more synthetic rubber to cut costs, said Henry Tong, chairman of the Association of Southeast Asian Nations Rubber Glove Manufacturers.
"The spike in natural rubber prices has caused significant differences between prices of natural rubber gloves and synthetic ones, which prompted cost-sensitive users like hospitals and the food industry to shift to synthetic rubber," Henry told Reuters.
Synthetic gloves may account for 30 percent of this year's estimated global sales of more than 130 billion disposable gloves, up from less than 20 percent before natural rubber prices surged in 2005, he said. Natural rubber gloves cost about $19 for 1,000 pieces, while synthetic gloves cost $14 for 1,000 pieces.
The association represents some 125 glove manufacturers in Malaysia, Thailand and Indonesia and accounts for more than 90 percent of global glove sales with a combined production capacity of 100 billion pieces of rubber gloves every year.
China supplies 90 percent of global demand for synthetic gloves. Prices of natural rubber have risen in recent years after Thailand, Indonesia and Malaysia decided to cut output to ease oversupply and on surging demand from China, the world's largest buyer.
The price of tyre-grade rubber has risen to more than $2 a kg from a 30-year low below 50 US cents in 2001. Rubber futures on the Tokyo Commodity Exchange hit 26-year highs of 324.5 yen ($2.6) a kilo last June. On Thursday, the benchmark rubber contract on the Tokyo Commodity Exchange for November delivery rose 2.0 yen or 0.75 percent to settle at 270 yen ($2.21) per kg.
Prices of petroleum-based products are stable despite a spike in crude oil prices because only the raw material is traded in the futures market, while natural rubber by-products are traded in the futures market, making them vulnerable to price volatility, said Henry.
"When semi-finished products are traded in the futures market, prices can go up beyond the scenario of supply-demand in the physical market. Prices are going up and down like a roller-coaster," he said.

Copyright Reuters, 2007

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