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THE impending easing of latex prices will lower the production costs of Malaysia's glove-makers Top Glove and Kossan.
BASED ON SEASONAL TREND, it seems that latex prices have peaked with the end of the winter period (Feb to April), and we expect latex supply to improve and prices to ease thereafter. This should take some pressure off production costs, thus giving glove producers room to price their products more competitively.
In any case, Top Glove Corporation Bhd and Kossan Rubber Industries Bhd have been successful in passing on cost increases to customers, with ASPs (average selling prices) rising 10% to 30% y-o-y (year-on-year).
Earnings not hurt by near-term margin contraction Top Glove and Kossan delivered record margins due to their ability to …