On Aug. 23, a class action lawsuit was filed alleging that some leading PVC pipe manufacturers exploited supply chain disruptions to fix prices and overcharge their customers for PVC municipal water and PVC electrical conduit pipes.

Three major PVC pipe distributors — Core & Main, Ferguson and Frontline Waterworks, were named as co-conspirators.

The lawsuit alleges that the manufacturers and above-listed co-conspirators “conspired and combined to fix, raise, maintain, and stabilize” the price of PVC pipe in the United States by coordinating price increases via OPIS – a paid commodity pricing service that publishes daily prices and market trends.

“It is well known that municipal PVC water pipe pricing has remained stickier than underlying PVC resin prices,” Baird’s Industrial Distribution research analysts said in a flash news update.

The lawsuit named several entities as defendants, including:

1. Ten leading PVC pipe manufacturers, which control the majority of the wholesale market for PVC municipal water pipes and PVC electrical conduit in the U.S.: Atkore, Cantex, Diamond Plastics, IPEX, JM Eagle, National Pipe and Plastics, Otter Tail, Prime Conduit, Southern Pipe, and Westlake.
2. Information exchange firm OPIS, which offers a reporting service for pricing and market intelligence in various industries (including PVC pipe) to paying subscribers.

The suit alleges that the above parties entered into an agreement, “at least as early as January 1, 2021 to exchange price signaling statements and competitively sensitive information” through OPIS with the purpose of “coordinating supra-competitive price for PVC pipes and effect of generate historic profit margins.”

A figure presented in the lawsuit, shown below, compares the actual PVC pipe prices (in blue) to the prices buyers would have paid in a market free of the alleged price collusion (in red, listed as “but-for”).

MDM will continue to monitor this situation as it develops.