From a loss of 326 million baht in the previous quarter to a windfall of 645 million baht in a single quarter, the global natural rubber giant, Thai Shidong Rubber, staged a stunning turnaround in just one quarter.
Recently, Shidong Rubber released its Q1 2026 financial report: net profit attributable to the parent company reached 645.4 million baht (approximately 130 million RMB), successfully turning losses into profits; EBITDA skyrocketed 307.4% quarter-over-quarter to 2.3693 billion baht.
Turnaround Strategy One: Production Zone Restrictions, Surge in Tire Raw Material Rubber Prices
The primary driver of Shidong's performance turnaround was the strong recovery of the natural rubber business, triggered by shortages in core tire raw materials.
Previously, rubber prices were plagued by speculative disturbances. However, Shidong CEO Veerasith pointed out that rubber prices in the first quarter had "shifted from speculative to real," returning to industry fundamentals. He emphasized: "The total supply of natural rubber from several major producing countries has not increased significantly, especially in Thailand and Indonesia, where production restrictions remain."
For downstream tire companies, this means the hard constraint of tight core raw material supply remains unsolved. Data confirms this trend: In the first quarter, the average price of TSR20 rubber (commonly used for tires) on the SICOM market reached 191.5 US cents/kg, a 10.6% surge quarter-over-quarter. Riding this wave, Shidong sold 341,800 tons of rubber, and the gross profit margin of this business jumped from 5.7% to 8.7%, becoming the most profitable cash cow.
Turnaround Strategy Two: Recovery of Glove Production Capacity, Icing on the Cake
Another engine is the comprehensive recovery of the medical glove business. Heavy flooding severely damaged production lines at the end of last year, but with operations restored, glove sales in the first quarter reached 9.159 billion pieces, a 4.6% increase quarter-over-quarter; capacity utilization rose significantly from 78.2% to 84.2%, directly converting into profit increments. Additionally, the gradual recognition of insurance claim proceeds from flooding further bolstered the current performance.
Conclusion: Cost Pressures for Tire Manufacturers Continue to Accumulate
From huge losses to windfall profits, Shidong's turnaround is a resonance of improved supply and demand and capacity recovery. However, for downstream tire manufacturers, this is by no means a relaxed signal. The persistent supply restrictions in the main production areas of Thailand and India suggest that the bottom support for tire raw materials remains strong. Against the backdrop of rubber prices returning to fundamentals and supply difficult to increase, the huge profits of the rubber giant may well herald the beginning of a new round of cost battle in the tire industry chain.
