Glove Prices Rise
There has been a sharp and significant rise in the cost of butadiene, the main ingredient/monomer in the production of nitrile. Butadiene was at $950 per wet tonne in September 2016 and it had risen to $2,500 per wet tonne in early January 2017. On January 16 butadiene was quoted at $2,870 per wet tonne.
There is a reported shortage of butadiene due to the closure of several plants. Another important factor is that China’s automotive industry is picking up and contributing to the huge demand versus the less than usual production of butadiene. The cost of nitrile is very much influenced by the price of butadiene as it constitutes about 70% of total nitrile cost.
In terms of nitrile, the average selling price from the various producers was at $946 per wet tonne in September 2016, and it had moved up to $1140 in January 2017 and is likely to move up by as much as $250 to $350 per wet tonne for February delivery.
We saw selling prices increase by $1.00 to $1.50 from September to December 2016. From March 2017 on, higher raw materials price need to be priced into nitrile glove prices by about $2.00 to $4.00. It is a moving target and even higher prices are more likely in the days ahead.
Incessant heavy rains and flooding in some areas have badly affected natural rubber producers. There was already limited stock and coupled with the flooding, it was inevitable that shortages would be severely felt, and if prolonged, could cause natural rubber prices to rise further.
In September 2016, the natural rubber latex average price was at RM4.56 per wet kilo and the February 2017 average was at RM7.98 per wet kilo. On February 28, it stood at RM7.73 per wet kilo. This has been a serious and sharp rise of about 75% from September 2016 to date.
From September 2016 to December 2016, we have seen gloves prices rise by $1.00 to $1.50 per 1,000 pcs. From March 2017, there should be another increase of $1.50 to $2.00 in tandem with the sharp rise of natural rubber latex price.
There has been a significant reduction in resin production due to pollution concerns. This has led to a 25% increase in resin prices in the second half of 2016. The Chinese Government restricted the amount of paste resin that may be made using “direct oil” method by 50-80%. Utilizing this method is most common in China because of the relatively low cost of coal used in the process. The primary remaining key suppliers are from Japan and the Middle East with higher-priced resin.
Many factories, including vinyl glove factories in Shijiazhuang, a city located in the North China Hebei Province, temporarily ceased operation on November 18, 2016 due to air pollution concerns resulting from their production process. The government is encouraging factories to convert their ovens from coal burning to gas burning. Negotiations are ongoing between the factories and the government. The temporary closing of these factories has caused a shortage of vinyl supply in the market. There are a total of 170 production lines shutdown in Shijiazhuang which is equivalent to an estimated volume of 1.7 million cases of gloves. Air pollution regulations matching those set in the city of Shijiazhuang have not been imposed in other areas of the country, however, it is possible that the policies might be enforced in the future. The regulations are an attempt to reduce the release of volatile organic compounds (VOC’s) into the air. It is important to note that many of their production capacities are full already due to the shutdown.
As a result of the increased price of resin and the factory shutdowns we are seeing immediate price increases averaging $2.00 per case.
Understanding Prop 65
Proposition 65 is a law requiring businesses to notify Californian residents regarding certain chemicals found in consumer goods. The law’s intent is to aid Californians in making informed decisions due to possible safety concerns over exposure to these chemicals.
In 2013, the California Office of Environmental Health Hazard Assessment added Diisononyl phthalate (DINP) to their list of chemicals regulated under Proposition 65. While several governmental regulatory organizations, including the Consumer Product Safety Commission and the European Chemicals Agency, have determined DINP poses no threat to health at typical exposure levels; manufacturers selling products containing DINP in California are required to either remove the DINP component or add a warning label by December 20th, 2014.
This requirement impacts disposable glove manufacturers and distributors, as DINP is a plasticizer frequently used in the production of vinyl gloves. As of December 20th 2014, Emerald Professional Protection Products ceased use of DINP is favor of Dioctyl Terephthalate (DOTP), a plasticizer that is fully compliant with California Proposition 65. Emerald Professional Protection Products is fully committed to quality and safety, and is proud to be your leading supplier of disposable gloves.
FDA Bans Powdered Exam Gloves
The Food and Drug Administration (FDA or Agency) has determined that Powdered Surgeon’s Gloves, Powdered Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon’s Glove present an unreasonable and substantial risk of illness or injury and that the risk cannot be corrected or eliminated by labeling or a change in labeling. Consequently, FDA has banned these devices.
This ban does not affect powdered gloves used in food service and jan-san applications. Visit https://www.federalregister.gov/documents/2016/12/19/2016-30382/banned-devices-powdered-surgeons-gloves-powdered-patient-examination-gloves-and-absorbable-powder for further details.