Clear Opportunity In The Tank Market

Crop prices may be down, but steel prices are too — and that’s good news for retailers looking to add some fertilizer storage. In fact, steel prices are the lowest they’ve been in seven or eight years, reports Butch Kirk, President of International Tank Service. “So it’s a buyer’s market if dealers want to build new tanks,” he says.

Chris Brooks, President of Heartland Tank Services, Inc. agrees, adding that steel prices are still holding if customers are buying domestic, plus domestic steel is not expected to go lower in the next 12 to 24 months.

Advertisement

But other news in the tank and containment segment is not quite as good. Not surprisingly, the depressed farm economy is impacting business here. Brooks says new tank sales have been extremely slow for 2016. Wholesale and retail customers are in a holding pattern waiting to see what fertilizer pricing does for fall and winter fills.

Top Articles
BASF Launches SCNFields.com to Raise Awareness of Soybean Cyst Nematode Populations

The fact that 2016 is an election year is also contributing to lagging sales, believes Kirk. “People are apprehensive about spending capital because they’re not sure who the next president is going to be, who will be in office, and how the election results will affect their business,” he’s found.

On a positive note, Precision Tank & Equipment (PT&E) reported a gain in sales in late summer, and at presstime, “our shop backlog is the best we’ve seen in several months,” says David Hemming, President. His take: Some of the tanks that were put off for early spring purchase have now become more of a necessity.

At Cady Inc., Nutristore sales were up as well — and 2017 is shaping up to be strong year too. Stephanie Wetzell, Sales and Business Administrator, admits that because of their price point, there’s an “acceptance curve” for Nutristore tanks. (The units are made of factory-coated porcelain glass, with no ongoing sandblast painting needed.) “It’s really no different than the price situation stainless steel transport tanks encountered in the early years of their introduction,” she believes.

While brand new products haven’t been moving the greatest for all companies, the repair side of many businesses in this segment has been brisk. “Many tanks are requiring new floors and shell repair due to poor quality foreign steel — without mill certifications — used when the tank was built. Many of these tanks we’ve worked on were less than 12 years old,” Brooks says.

In fact, the need for similar repairs will continue as some competing tank builders continue to use de-coil, foreign steel that does not meet API 650 quality specifications, he adds.

International Tank also has been seeing a call for repairs at clients’ facilities. Staff there have been putting new steel bottoms in fertilizer tanks, which can add 10 or 20 years of life to the structures. (New builds, materials and repairs at the company are all done under API codes.) In this challenging season, Kirk says repairs are accounting for 50% of sales, and new tanks, 50%.

Enviropac Inc. offers fiberglass tanks as well as steel options, and Dennis Neal, President, points out the fiberglass components do not rust and are maintenance free.

For longevity in containment structures, Christina Schmidt with J.C. Ramsdell Enviro Services recommends the company’s wooden containment dike “that unlike concrete, will never crack.” The company has had systems installed and in use for over 20 years at facilities, and the firm offers repairs and maintenance to existing tank farms as well as designs, builds and expansions.

Internal flexible PVC liners continue to be a popular choice for secondary containment, according to Heartland’s Brooks. As liners reach the end of their 20-year life, customers are opting to replace them, continuing to use this efficient secondary containment method.

Answering Trends

One trend most manufacturers mentioned was a growing move to liquid fertilizer, away from anhydrous. “It’s all about the price the farmer has to pay and availability of product,” says Brooks.

Safety awareness and increasing costs of anhydrous ammonia (NH3)storage and handling are gradually moving UAN tonnage higher in market share, adds Wetzell. Thus, increasing the need for Nutristore storage tanks, she notes.

“We see good demand in nitrogen solutions verses ammonia as well,” says Ken Hunter of Hunter Agri-Sales, Inc. And while his company’s sales to the ag industry are down considerably, he’s still optimistic about the liquid fertilizer industry.

PT&E’s Hemming foresees an increasing market share in liquid storage tanks and containment for Precision Tank and A&B Welding. For one thing, governmental concerns over runoff issues will continue (with the Illinois Fertilizer & Chemical Association taking the lead in being proactive on the topics). In addition, signs point to less fall application over time and more spring application. “Ultimately, this trend should lead to more liquid used in the spring, especially with its added benefit of serving the additional function as a chemical mix base,” says Hemming.

Besides supplying storage needs for more liquid use, companies anticipate working with more regulations. Something they’re well acquainted with.

“We’ve worked with state agencies which each have their own regulations — and often times they have conflicting regulations which are difficult for customers to understand,” says Ramsdell’s Schmidt. “We often see state departments of ag not agreeing with the state’s environmental protection agency. This is where our history and expertise becomes so valuable.”

In fact, regulations and permit requirements can play a role in extending project completion times and getting permits alone can take anywhere from three to six months, describes International Tank’s Kirk. The company team stays on top of many states’ requirements for customers in its territories.

Manufacturers’ News

Tank and containment engineering and materials don’t necessarily advance every year, but firms contacted had a few developments to report.

At Cady, the Nutristore porcelain glass coatings are now being utilized to encapsulate the sheet edges, and the no-maintenance-required, free span aluminum Temcor domes are enjoying a simplified design offerings in 2016.

Nutristore size offerings now include the 14- x 38-foot model which works well as an option for tank storage inside of secondary diked containments. One 14 x 38 unit can replace two of the steel or fiberglass tanks in this application. In addition, the Nutristore 2 million gallon storage tanks are working well in the field and are gaining interest as tank storage is becoming larger.

Hunter Agri-Sales is getting increased interest in the firm’s Plia-Tank, built in sizes up to 300,000 gallons, allowing customers to store more material at their plants. “The Plia-Tank unit is made of concrete and synthetic liners, and there is no exposed steel, thereby making it more maintenance free than steel tanks,” says Hunter.

He is also seeing more interest in covered secondary and primary storage. Here, the dealer doesn’t have to deal with rainwater inside the dike.

Companies themselves continue to evolve to meet the needs of customers. Heartland’s Brooks and Greg Wolford of W. Design Associates launched Total Fertilizer Construction, Inc. this year. The new firm — along with partner companies Kahler Automation, Farmchem, and AAK Mechanical — offers cost effective turnkey construction for new and or updating of facilities.

A&B Welding — now part of PT&E — has added significant efficiency in builds by incorporating an automated girth welder in field erected tank welding capabilities, thanks to company Field Crew Foreman Jake Flink.

0

Leave a Reply

Avatar for Corey Vance Corey Vance says:

I work for Mueller Field Operations, a subsidiary of the Paul Mueller Company, and am available if anyone would like to discuss their tank needs. Shop fabrication, field fabrication. repair, service, and construction management are among our core capabilities. Our specialty is stainless steels and high alloys, but we have no limitation on repair work regarding steel applications. Ask me about our tank fabrication methods that improve quality, safety, and efficiency while reducing schedule.

Corey Vance
417 633 0222
[email protected]

Alliance Tank Service is a nationwide industry leader in turnkey tank construction and related services. We pride ourselves on the continuous improvement of our construction processes to better service the customer’s needs. Alliance Tank has been implementing the use of automated girth welders on our field erected storage tanks since 2012. ATS also utilizes 10ft wide sheets of steel during erection of 30ft, 40ft, and 50ft tall tanks, this allows for our projects to be completed on a highly efficient timeline allowing tanks to be expedited into operation. In addition to API 650 new tank construction, API 653 tank repair and our full time piping crews, ATS fabricates carbon and stainless steel tanks at our facility in Cushing, OK to be shipped to our customers all across the United States.

Austin Prough
918-285-1521
[email protected]

Advertisement
Advertisement