PETALING JAYA: Plastics and packaging manufacturers may report slightly lower margins in the fourth quarter of 2020 (Q4) due to higher resin costs, says Kenanga Research.
“Judging from previous swings in resin prices, plastic packagers’ margins tend to reflect resin price movements one or two quarters after the fact, ” it said.
“Therefore, the Q4 results may begin to reflect margin compressions from the higher resin costs, which we’ve already accounted for in our 2020 estimates, as we assumed average resin costs of US$950-US$1,100 per tonne for 2020, ” it added.
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