Over $25 million worth of mining and industrial equipment and machinery was yesterday auctioned at Ritchie Bros. Victorian site.
About 950 lots of heavy equipment were quickly turned over with 1,440 registered bidders participating in the unreserved auction.
The auction company’s president Rob Mackay told Australian Mining that global output affects equipment sales.
He said that following Europe’s slow down a lot of equipment has been exported to Australia for sale.
“Equipment is very moveable, it finds its way to where the demand is,” he said.
“Our business is active when there is change in the market place, so if there is an economic boom people are trading older equipment and buying new and if there’s a downturn people are trading surplus equipment.”
Mackay explained that the strong Australian dollar has benefitted both buyers and sellers of mining equipment, with sellers experiencing strong sale results for used machinery and buyers taking advantage of the strong Australian dollar to pick up equipment overseas.
“Equipment has always been more expensive in Australia in comparison to elsewhere in the world,” he said.
In 2010 and 2011 Ritchie Bros. experienced heightened activity from Australian machinery and equipment buyers overseas but a “shroud of uncertainty” hit the market in the second half of 2012.
“With the activity going on down here [in Australia] they [miners and contractors] needed more equipment,” Mackay said.
“The uncertainty in Australia last year with a number of announcements from the mining companies and the carbon tax introduction put a pause on Australian’s travelling abroad to buy equipment.”
But going forward Mackay said equipment pricing trends will be affected by the number of new mines coming online, which in Australia isn’t as healthy a number as times gone by.
He stated that the looming September election is also causing uncertainty within the heavy equipment and machinery market.
“Similar to what happened in the US last year everybody is waiting for the election, wondering what is going to happen.”
Demand for heavy duty equipment will also be affected by rising input costs and falling commodity prices.
Looking ahead, Mackay said the company will widen its focus on Asian markets which are showing substantial opportunities for growth.
“It’s an area with a lot of infrastructure growth and that’s where a lot of the demand for equipment is going to come from,” he said.
Ritchie Bros. vice president Warwick Mackrell said yesterday’s auction attracted bidders from across the globe to the new 40-acre site located in Geelong.
"We are very proud to welcome bidders from across Australia and around the world to our new facility in Geelong," he said.
“People registered from all around Australia as well as from overseas, including registered bidders from the United Kingdom, Singapore and the Netherlands," added Finlay Massey, Ritchie Bros. regional sales manager.
The new auction house was officially opened yesterday by John Stewart, CEO of Victoria Civil Contractors Federation who said it is an important part of Australian industry.
"Ritchie Bros. is a staple in our industry and very important to the development of our growing region,” he said.
All of the 950 lots belonging to 115 consignors yesterday sold.
One consignor was Tasmanian based contractor Hazell Bros., selling more than 25 heavy equipment items, including concrete trucks, wheel loaders and prime movers.
"The advantage of selling with Ritchie Bros. is that you not only sell to Victoria, or the local market, but you sell to all of Australia and beyond," Robert Hazell, Director of Hazell Bros. said.
"We recently finished a project and had some surplus equipment that we decided to sell.
“Competition was strong and we had good results in the sale of our gear."
Australian Mining attended yesterday’s auction which was a hive of activity, speaking to a number of buyers, they said what attracted them was the unreserved format of the auction.
One successful bidder was Matthew Hoare, managing director of Geelong-based mining and earthmoving contractor Hoare Bros.
"What I find incredible as a buyer is the ability that Ritchie Bros. gives me to find equipment that I need -but would otherwise need to source from overseas- at an auction that's in the same location where my business is based," Hoare said.
The company conducts used mining and materials handling equipment auctions worldwide with over 130 unreserved public auctions scheduled for 2013.
Australian Mining attended the auction as a guest of Ritchie Bros.