On Record
on record | by Marcia Gruver Doyle
After a hard day’s bidding
A
Non-U.S. buyers have always been a
driving force
in the Florida
auctions, and
it’s widely
held that overseas buyers
kept used
equipment
prices from
tanking even
more than
they did.
s always, the state of
current used equipment auction prices is
a matter of perspective. Making my way
through the Ritchie Bros. Auctioneers reception after the second day
of their six-day Orlando auction,
two perspectives were evident
when I asked the question, “how
are prices?”
“Good” said several sellers.
“High” said a contractor, making
a face.
The February Florida auctions,
simply because of the shear volume
of equipment sold at live events
such as those by Ritchie, Yoder and
Frey Auctioneers, Alex Lyons & Son
– and this year, IronPlanet – act as
a pricing bellwether for the year.
For their part, Ritchie had more
than 10,400 items on the block,
beating its previous record of 8,600
items. They sold a personal best of
$203 million, with 36 percent of the
equipment going to buyers outside
the country.
Non-U.S. buyers have always
been a driving force in the Florida
auctions, and it’s widely held that
overseas buyers kept used equipment prices from tanking even
more than they did in the past few
years.
Ritchie says they’re seeing demand rising in Australia, the Middle
East, Latin America and countries east of Asia. Last year, while
Canadians were the largest buyer
of U.S.-sold equipment in Ritchie
auctions, Mexican bidders bought
$100 to $120 million in equipment,
and buyers in Australia and Columbia each bought between $10 and
$20 million. Right now, “pricing
in Australia is significantly higher
than anywhere in the world,” says
Rob Mackay, Ritchie president,
with buyers nabbing scrapers, rock
trucks and wheel loaders.
This dependence on foreign sales
has people openly worried, because
a schism is looming in the global
market. Tier 4 machines require
ultra low sulfur diesel, and many
traditional equipment markets don’t
have ULSD, nor will they likely
have it in two to five years, when
used Tier 4 machines start cranking
into the market. This means that
key traditional migration patterns
for this equipment will be interrupted. (More on this in upcoming
issues.)
One broker I talked to sees this
two-tier market creating a glut of
U.S.-originated used equipment in
three years. And this quote from
January’s dealer magazine Construction Equipment Distribution
caught my eye. Commenting on
what he sees ahead, Steve Branson,
president of Phoenix-based Road
Machinery, said: “When these Tier
4 machines come into the used
market, the export market is going
to have shrunk – and today the
export market is the market.” He
continues: “There probably isn’t an
equipment dealer in the country
that isn’t thinking, ‘What the hell
are we going to do with this stuff in
a few years?’”
There’s the hope that the longdeferred construction recovery will
be in full swing by then, creating
additional demand. But some today
are questioning whether even that
will be enough. EW
EquipmentWorld.com |March 2012
9