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January 1, 2011updated 12 Apr 2017 4:17pm

Overview of the yearly trends at auction

The first half of 2010 saw a number of surprising trends in the used plant and machinery sector, with manufacturing of new plant still on hold and the price of year-old machinery strengthening. In the last six months, the market strengthened due to dwindling stocks in the UK and Europe, and a lack of new or less than 12-month-old equipment coming onto the market.

By Jonnie Keys

Euro Auctions managing director Jonnie Keys gives a snapshot of price at auction in 2010.

 

Photo of Euro Auctions MD Jonnie KeysThe first half of 2010 saw a number of surprising trends in the used plant and machinery sector, with manufacturing of new plant still on hold and the price of year-old machinery strengthening.

In the last six months, the market strengthened due to dwindling stocks in the UK and Europe, and a lack of new or less than 12-month-old equipment coming onto the market.

The major manufacturers are now producing again, but not at the levels of mid-2008. Stock levels are low, and waiting lists for new machinery are currently ranging between one and three months.

The feeling is that manufacturers are holding back, waiting for confidence to return to the marketplace.

Demands have changed in the last six months with a swing towards heavier machinery and equipment. The smaller equipment that was in high demand from North Africa and the Middle East has softened due to lack of stock.

UK plant operators have historically replaced machinery and equipment every two to three years.

Now, with stock levels at an all-time low, this has created a demand that has manifested in a levelling of prices across all of Europe with the cost of brand new equipment now 20% up over prices in June 2009.

Equipment less than 12 months old is naturally in high demand globally with strong interest from the Middle East. The Far East was showing signs of a slowdown in June 2010, however in the last six months, culminating in the Euro Auction sale in Valencia on 10 December, demand has risen again.

 

China demands

In particular the Chinese are showing keen interest in excavators and bulldozers by Komatsu, Hitachi and Kobelco, which are being snapped up at auction for good money.

As the economy in China strengthens, so has the Chinese demand for raw materials from Australia. Interest at auction has been seen from companies in Australia for quarrying equipment, destined for Chinese supply contracts.

The Australian demand is for equipment such as large excavators, articulated dump trucks, crushing and screening equipment, in addition to ancillary items of plant for manufacturing and raw material processing.

So high is the demand by China for Australian raw materials, the whisper going around the auction market is that China is quietly and actively buying stock in Australian mining corporations.

In the months from June 2009 to June 2010, the North Africa market continued to be buoyant, with interest at auction from Libya, Egypt, Morocco, Iraq, Lebanon and Oman.

The increasing demand from these countries has shown an improvement in buying prices at auction, as these new entrants developed an appetite for smaller excavators, dumpers, and access equipment.

It seems that this demand has stabilised and is maintaining healthy interest. In 2011 it is anticipated these countries will show interest in larger pieces of equipment as well as trading up to newer equipment or low hours models.

 

Buyers and sellers

Bar chart showing auctions 2010 – buyers’ locationsWhile buying and selling at auction remains consistent and buoyant, the trend of the buyers and sellers proves to be interesting. Ireland is nervous due to the current economic climate, which has manifested as a slowdown in other Eurozone countries.

All eyes are on the Irish economy and Euro Auctions expects other eurozone countries to take a lead from Ireland when confidence improves.

Poland is still buying strongly, which is a trend shared by bordering eastern European counties. Scandinavia has always been another strong and steady market participator, however in the last six months buyers from Finland have been among the most stable buyers at auction.

Russian buyers have been noticeably absent from auction during the last 24 months, fuelled by a very depressed economy and lack of confidence by Russian banks.

This trend is showing signs of changing, with renewed interest from Russian buyers and sellers at all recent sales. The prediction is that Russian interest will be strong in 2011.More than half of all items sold at Euro Auctions sales will be shipped outside of the UK (see chart, above).

 

Plant sales

In the last six months of 2010, Euro Auctions held more disposal sales in the UK and the Republic of Ireland than in any previous year. Entire manufacturing plants have been auctioned onsite and sold in one day.

Sales of concrete and asphalt manufacturing plants in the UK have been the main focus of specialised sales.

Interest for all sales held in the later part of 2010 came predictably from the Middle East, Far East and from Australia, where confidence is high.

Following market demand Euro Auctions opened its new permanent auction site in Valencia, Spain on December 10 2010. The Valencia site is strategically positioned to support the buoyant markets of North Africa, south Eastern Europe and the Middle East.

The Spanish trader mentality made a permanent sale site in Valencia a logical choice. With a depressed Spanish economy, reflecting the downturn in the Republic of Ireland, large consignments of assets are available for disposal at auction.

Euro Auctions is the UK’s largest specialist auctioneers of plant, commercial, and industrial equipment

Table showing year-on-year price comparison for used equipment sales

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