High-cost containers for high-value products
By Staff -- Purchasing, 11/4/1999
Are you shipping high-value chemicals or chemicals where purity is a concern? Stainless steel intermediate bulk containers (IBCs) may be a good way to gain the value of shipping in bulk volumes while maintaining product integrity. Compared with plastic IBCs, price tags of stainless steel containers can cause sticker shock, but taking into account the value of the products being shipped--some values can run as high as $1,000/gallon--higher costs seem reasonable.Despite the preponderance of plastic IBCs, some customers are switching back to metal containers. Although a niche container, there has been a steady demand for stainless steel IBCs, mainly from users who deal in the types of products that need the extra safety. But there are other applications as well. In some cases, products are not compatible with polyethylene or even carbon steel, due to hazardous or corrosion issues. Stainless steel containers can also allow for pressurization of their contents for dispensing requirements.
Purity remains another concern. Stainless steel is in high demand by applications including the dairy and bakery industries, food processing, pharmaceuticals, electronic chemicals, solvents, and some agricultural chemicals--really anywhere that purity is required for health, safety, or chemistry reasons.
The containers themselves are among the strongest and most reliable on the market. Stainless steel won't brittle, crack, or corrode if stored outside. The containers can withstand long exposure to sun and high heat.
How to beat the high cost
Stainless steel IBCs are expensive, but with good maintenance and reconditioning, a stainless IBM can pay off long term by lasting ten to twenty years. For users who don't want to invest the money, many IBC suppliers offer rental or leasing options. From daily rentals and lease-to-own programs to trip-lease programs and custom leasing, initial costs of these IBCs can be driven way down. It also gives prospective users the opportunity to test containers to make sure they work in their distribution system and to see the benefits they provide first hand, with little financial risk.
Price tags for stainless steel IBCs should remain fairly stable over the coming year. Already high-cost specialty items, they compete more on their attributes than on comparison pricing. A good way to see where tags may be headed is to watch the price of type-304 and type-316 stainless steel, as costs are strongly affected by steel price movements.
Prices for type-304 sheet dropped from an average of $1,720/ton in the fourth quarter of 1998 to $1,630/ton in the first quarter of this year. Tags dipped again in the second and third quarters, and are expected to close out the year at $1,580/ton. However, tags are expected to rebound in 2000, rising to $1,635/ton in the first quarter. Prices are forecast to rise for the rest of the year, hitting $1,712/ton by the fourth quarter.
Type-316 plate rose from an average of $1,907/ton in the fourth quarter of 1998 to $1,926/ton in the first quarter of this year. Tags slipped way down in the second and third quarters, but are forecast to rise to $1,821 by year's end. Tags are expected to continue to rise in 2000, hitting $1,916/ton by the second quarter, and $1,939/ton by the end of next year.
Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
Now Playing:
