MSC Industrial tackles glove trouble as US pandemic treatment imports slip

Industrial supplies distributor MSC Industrial Direct Co. Inc. has taken an impairment due to a prepaid, but undelivered, order for nitrile gloves. Sourcing rubber gloves as part of the company's personal protective equipment offering during the coronavirus pandemic has been "challenging," with the company finding "normal channels of supply could not produce sufficient quantities as the nitrile glove global supply chain is under extreme pressure," according to CEO Erik Gershwind.

The failed delivery likely relates to supplies from Top Glove Corp. Bhd., which have been subject to a Withhold Release Order by U.S. Customs in relation to alleged forced labor issues in Malaysia and subsequent government actions in the country, as discussed in Panjiva's research of Nov. 18. 2020.

Panjiva's data shows that U.S. seaborne imports linked to Top Glove fell by 65.5% in the fourth quarter of 2020 compared to their peak in the three months to July 31, 2020, led by an 81.0% drop in imports from Malaysia that was only partly offset by a 43.9% increase in shipments from Thailand.

MSC's challenges come as there is a wider slowdown in U.S. imports of products needed to tackle COVID-19. Panjiva's analysis, based on tariff codes identified by the U.S. International Trade Commission, shows total inbound shipments dropped by 9.2% sequentially in November 2020 to $10.87 billion. That left the aggregate 24.7% lower than June 2020's peak.

Panjiva's data shows that shipments of personal protective equipment more broadly dropped by 11.0% sequentially in November 2020 to $1.995 billion, a full 55.1% below the level seen in June. Only one of the eight categories identified by the analysis has improved. Diagnostic kit imports rose by 2.3% sequentially in November 2020 but are 2.9% below their June 2020 levels.

Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.