On Friday, the share price of Sri Trang Agro-Industry Public Company Limited (SET: STA) was at THB 17.9, a THB 1.1 or 6.55% increase with a total trading value of THB 354.20 million.
Finansia Syrus Securities stated that it holds a positive outlook for the rubber industry trend, due to the gradual decline in global rubber supply, which is expected to drive rubber prices into a continuing uptrend over the next three years.
STA’s management remains confident in its 2026 sales volume target of 1.6 million tons, representing 13% growth year-on-year. Currently, the company already has purchase orders in place for the first half of the year, even though overall demand has not been particularly strong. However, low inventory levels among clients, together with tight supply, provide support for the business.
In the longer term (1–3 years), rubber prices are expected to maintain high levels and may even increase further, driven by continued rubber supply reductions in Thailand. This is in line with other major producers such as Malaysia and Indonesia, where output is also declining.
Thai rubber production has already dropped about 30% since 2018 and may decrease by up to 50% over the next three years. This is mainly due to the onset of the El Niño condition, which is expected to have an impact in the second half of 2026 and become severe in 2027, as well as the decline in rubber plantation areas for the seventh consecutive year as farmers switch to planting oil palm, which yields higher returns.
Nevertheless, the decrease in supply could pose risks of raw material shortages. STA has prepared plans to address this by developing the Sri Trang Friends Application platform to improve the efficiency of direct raw material purchasing from farmers, with 99% of current purchases already conducted via this application.
Furthermore, the higher synthetic rubber prices have led to increased demand for natural latex. The latest price of concentrated latex stands at THB 72.6 per kilogram, up 37.8% since the beginning of the year, which is a positive factor for players across the industry, especially glove manufacturers who can shift production from nitrile rubber to natural rubber, giving them a competitive edge and allowing them to adjust sales prices accordingly.
In the short term, SICOM rubber prices are expected to move within a range of 190–210 cents per kilogram, a level deemed balanced for both buyers and sellers. The support level is around 175–180 cents per kilogram, which is the cost base for African producers. If prices rise above 210 cents per kilogram, it could negatively impact tire manufacturers.
The opportunity for short-term rubber price increases remains open, fueled by factors such as rising SBR synthetic rubber prices, reaching 220–240 cents per kilogram, and tight natural rubber supply during Thailand’s tapping off-season (February–May).
Strategically, short-term speculative investment is still recommended within these price bounds. However, should war situations ease and oil prices drop, this could cause commodity and equity prices to consolidate before recovering again in line with rubber’s fundamental price drivers.
