After see many article of "there is a demand for glove" for vaccine, somehow feel is not quite right.
The explosive profit for gloves is about ASP.
Yes, demand up, ASP up.
But ASP can drop as well with demand still good.
Demand good does not necessary means ASP keep on rising, if supply manages to meet the demand, or less people stocking up further.
If vaccine indeed tame the covid, then there is less urgency for many to stock up tons of gloves and PPE products.
Take example.
Mask.
Mask demand is 10x or 20x compared to pre-covid level, demand still good until today, as worldwide population are wearing mask across each day.
But price has dropped from the extreme peak because supply ramping up while lesser people hoarding.
ASP could be affected by stoking up by traders and forsee shortage besides the actual usage demand.
Just like people rush to buy groceries when lock up was announced until supermarket empty, because everyone stocking up instead actual consumes those groceries within the short period.
Actually, what we need to do is to monitor the ASP, this is the ultimate barometer for glove.
Write so many articles promoting ASPS, glove demands and growth also no use when syndicate sentiment is low.. no syndicate to push the price, good performing companies' prices wont move.. like how they are punishing semicons right now..
Nov 17 2020, 06:06 PM
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