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Tank suppliers advise propane retailers to plan ahead on projects

April 25, 2019 By    

Bringing the propane industry together is one of the many responsibilities we have at LP Gas.

We do this throughout the year through our monthly print edition, our website and our other digital offerings. We even do this through events, such as October’s LP Gas Growth Summit. These are all avenues for propane industry members to learn, connect and uncover ways to grow their businesses.

Our April issue, the LP Gas Buyers Guide, is undeniably a part of this mix of offerings to the propane industry and a key cog in streamlining the buying and selling process.

Tank trends

Tanks are one of the many equipment categories in the Buyers Guide.

In recent months and extending back into 2018, we’ve heard reaction from the industry about extended lead times and rising prices on new propane tanks, notably the larger bulk vessels of 30,000 gallons and above.

Jeff Vandemark, the president at Industrial Propane Service in Byron, Michigan, acknowledges the extended lead times on many new, large tanks. A 33-year veteran of the propane industry, Vandemark says the inventory for used bulk tanks doesn’t match the levels seen of decades past, which puts more responsibility on the manufacturers. Having more tank manufacturers in the industry today is a benefit to propane retailers, he says, but many companies build to order, meaning retailers must account for the time needed in the manufacturing process.

Other variables also can come into play, affecting the timing of the finished product.

“Last year was a tough year because it seemed like every market flooded the steel mills,” says Glen Williamson of Quality Manufacturing Group in Columbia, Mississippi. “There was the fear of steel price increases with the [Trump administration] tariffs, so it just drove the sale prices up and then pushed all the lead times out, with companies buying ahead thinking the price of steel would go out of sight. It went up for a while and then stabilized.”

Williamson says his company is in good shape, as far as having the needed materials to build tanks, but believes a good 2018-19 winter for propane demand might impact the timing of when retailers place their orders.

“Lead times are getting extended because the market is strong right now,” adds Michael Kruger of Westmor Industries in Morris, Minnesota, in mid-March. “People are adding storage because of the winter we’ve had, and some are saying there’s going to be a shortened install season this year because we’re going to have a wet spring.”

In fact, nearly two-thirds of the Lower 48 states face an elevated risk for flooding through May, with the potential for major or moderate flooding in 25 states, according to the National Oceanic and Atmospheric Administration’s (NOAA) U.S. Spring Outlook. Late-season snowfalls, the ensuing melts and spring rains contribute to the risk. The majority of the country is expected to experience above-average precipitation this spring, NOAA says.

While not a surprise, manufacturers’ messages to propane retailers are plain and simple: Plan ahead.

“We encourage them to do as much planning as possible, to be looking out further than what maybe they’re accustomed to, to ensure they get what they want, when they want it,” Kruger says.

While our discussion here has centered on new, large bulk tanks, we should note that some industry providers also offer refurbished DOT and ASME tanks, which you’ll also find in our Buyers Guide.

Yearlong shelf life

We encourage our readers to utilize this Buyers Guide throughout the year, both in print and at lpgasbuyersguide.com.

Let us know if there’s something you can’t find or if you’re a supplier of propane equipment and services wanting to add your company’s listing to our database.

Chloe Scoular, our Buyers Guide manager, is happy to help.

About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at brichesson@northcoastmedia.net or 216-706-3748.

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