Plastic pipe makers may underperform in near term on Omicron stress

Weak Q3, lower PVC prices, demand uncertainty are key concerns

A muted December quarter (Q3) performance and near-term demand worries over the spread of the Omicron variant of the novel coronavirus could put pressure on the stocks of listed plastic pipe makers. What could have an incremental negative impact is falling prices of polyvinyl chloride (PVC) resins, the key component in plastic pipes.

After peak prices in October, which led to higher realisations, PVC prices have corrected about 20 per cent. After a price increase in October, PVC makers cut prices in November. Given the declining trend of prices, distributors have been de-stocking inventory. This is expected to weigh