Last week, Brent crude broke through US$100 a barrel and hit a four-month high of US$109.97 on 11 September, as tensions around the Strait of Hormuz escalated. Oil has remained elevated since, with Brent still above US$100 on 16 September.
For Bursa Malaysia investors and traders, it felt like a blast from the past.
Glove makers surged unexpectedly over the last 5 trading days to 15 September. Top Glove Corporation Berhad (KLSE: TOPGLOV) led the pack with +27.56%, while Hartalega Holdings Berhad (KLSE: HARTA) jumped by 23.81%. Kossan Rubber Industries Berhad (KLSE: KOSSAN) and Supermax Corporation Berhad (KLSE: SUPERMX) also chalked up gains of +17.14% and +14.08% respectively.
Yes, this may look like déjà vu. But there is no pandemic-driven demand shock this time.
So what is driving share prices up?
A tale of gloves and oil
If you know the glove-making business, you’ll know that many modern medical gloves are made from nitrile butadiene rubber, or NBR.
NBR latex is produced using petrochemical feedstocks including butadiene and acrylonitrile. So when crude oil and petrochemical prices spike, the cost of producing nitrile gloves tends to rise as well.
Again, higher input costs should mean thinner margins, so why on earth would a crude oil rally send glove stocks up as well?
The reason for the rally might seem counterintuitive.
The Counterintuitive Logic: Cost Inflation Ends a Price War
For three years, Malaysian glove makers have been squeezed by a brutal price war. Chinese manufacturers flooded the market with cheap gloves and crushed everyone’s pricing. The biggest of them, Intco Medical, grew its nitrile capacity from 56 billion pieces in 2024 to 70 billion in 2025, and it had already reached 74 billion by June this year.
Here’s the key insight. In a commodity price war, the thing that ends the war isn’t demand. It’s a cost shock that hits everyone at once.
When butadiene costs surge on the back of an oil spike, Chinese producers feel it just as much as Malaysian ones. And when everyone’s costs jump at the same time, even the most aggressive discounter has to raise prices. Selling below cost to win market share only works for so long.
That appears to be what happened this time. Alongside the oil spike, China’s market leader Intco was reported to have raised its prices. Once the cheapest player moves, everyone else can follow, and Malaysian producers who have been holding the line suddenly have room to charge more.
That’s the logic. On its own, an oil spike is bad for margins. But if it ends a three-year price war, the benefit of higher prices can outweigh the higher costs. Cyclical commodity markets work in exactly these violent, non-linear turns.
Is there a real tailwind for Malaysian glove makers?
The oil spike is the spark, but there could be real structural factors that build a bull case once again for Malaysian glove makers.
The tariff moat is real and substantial. The US raised tariffs on Chinese medical gloves to 50% in 2025 and 100% from January 2026. Stack the other duties on top and Chinese gloves now face tariffs of more than 100%, making them far less competitive in the high-margin US market.
Hospitals have also worked through the glove stockpiles they built during the pandemic, so orders are back to a normal cycle. That also spells a return to normalcy from an order and usage cycle.
Put those together and the sector is in a better place than it was two years ago. Utilisation has recovered and the tariff wall is intact. That gives a legitimate improved backdrop.
So clear skies ahead?
It would be premature to think so, or to forget what happened earlier this year.
This is already the second time in 2026 that the market has run a similar playbook. During the first half of the year, glove stocks also staged a surge on the same crude oil rally thesis, with a hantavirus scare in May adding fuel. Those gains faded after the US and Iran signed a peace memorandum in mid-June that reopened the strait, and prices of nitrile latex, the key raw material, fell by more than 20%.
The reason the rally kept fading is the global oversupply. Industry analysts estimate 2026 global glove supply capacity at around 418 billion pieces versus the demand of roughly 330 billion.
That is a structural glut. Worse, there are an estimated 40 billion units of hibernated Malaysian capacity that can be switched back on if average selling price rises enough to make these lines profitable. Not to mention another 30 billion to 50 billion units under construction across Southeast Asia.
While the catalysts and tailwinds are there, the capacity overhang is the elephant in the room that the bulls must never forget.
Verdict
Is the rally justified? Yes.
Can we assume the coast is clear? Not at all.
Fundamentally, there are legitimate reasons for glove stocks to attract attention again. But just like the past, we’ll never know when a ceasefire will occur. And whether the higher tariffs targeted at Chinese manufacturers still hold if there is a change in the US government.
There are still too many uncertainties, and it seems like glove making is not as moat-y as it was back then during the pandemic.
And even if the tariffs go on and on, the supply glut is still there.
Six years ago, amidst the euphoria, I was skeptical. Six years later, the skepticism remains.
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