Propane Tank Store… Tip#5
Why do the sides of my propane tank freeze up?
As you use the vapor propane (that resides in the top of the tank), the liquid (in the bottom of the tank) begins to release replacement vapors. The liquid propane inside your tank must absorb warmth from the steel walls of your tank in order to convert the liquid to a vapor.
If your vapor withdrawal rate is larger than the liquid conversion rate, the steel will begin to freeze as the liquid propane is demanding
more and more warmth.