Used Equipment Recovery Trends Report Q2 2015

Q2-trends

Special Report: 4 Very distressed used equipment segments

CNC Machining

Foreign OEM’s are heavily discounting CNC equipment which is having a very strong effect on domestic and international used equipment sales. In the short-run, the supply of these machines will decrease at the discounted price, as these assets are in high demand. In the long-run, the OEM’s will be forced to increase the supply of CNC machines to satisfy demand. Economically speaking, this increase in supply will drive the price back (down) to equilibrium. When this happens, consumers will have reason to consider substitutes (Non-foreign OEM’s including used equipment). Until this happens, we can expect the market for used CNC equipment to feel the pain.

Scrap Metals Processing Equipment

Prices of shredded scrap steel have plunged about 18% so far this year and are down 41% since early 2012. In this equipment sector, we are seeing idled assets, deferred maintenance and extremely low capital expenditure spending, all negatively effecting the used equipment market.

Coil Steel Processing/ Steel Service

Right now there is a flood of both domestic and imported cold-rolled stainless steel, leaving service centers with higher than desired inventories, as such the market for used equipment is taking a very hard hit as companies have lowered their capital spending to historic lows leaving few potential purchasers for the related assets. There is one area of this asset class where the values remain stable; Class One Automotive. These assets and marketability to the automotive industry puts them in a different category and continue to have a robust purchasing base.

Mining

Equipment values, especially ground mining related remain soft as OEM’s continue to o!er low prices on new equipment. Coal related assets are particularly soft.

We expect equipment values to be particularly soft for the above mentioned equipment segments until prices stabilize. We recommend an updated frequency of valuations until that happens.

Over 50 upcoming machinery & equipment sales scheduled for Q3 2015 in over 15 countries
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This report is a 12-week snapshot of the current used equipment market compiled by Hilco. The information comes from Hilco Industrial auction and liquidation results with additional statistics provided by our vast used dealer network and market research.

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