Condensation and frost on outside of air intake of Direct vent WH

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Adkroot

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I recently put an AO Smith GDV-40 lp gas, direct vent, sealed combustion water heater into service that utilizes a 7” air intake which houses the exhaust vent. This is a non-powered direct vent heater.
Condensation is forming on about a 3”length on the outside of the air intake pipe right where the pipe enters into the building from the outside wall. The points inside the home and outside where the pipe intersects the wall are effectively sealed.
There’s always some condensation, and during subzero temps it frosts right up and of course drips down the wall when the temps climb to the double digits.
There’s otherwise no condensation forming along the length of the air intake - just that short portion right at the wall. It’s the cold air coming in, cooling the vent, and the moisture in the warm indoor air is condensing at that coldest point. I’d like to prevent that condensation from forming and eventually dripping down the wall, but I’m not sure what if anything to do.
Thanks, Daniel
 
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