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