Used Machinery Market Shows Performance

The machinery glut that was fed by the market's excesses at the turn of the century—and then the industry consolidation that followed—has largely subsided, with the latest upturn in business prompting the purchase of new equipment. Conversations with machinery suppliers to the industry reveal that for injection molding, especially within the automotive sector, business started coming back in 2010 in a way that hadn't been seen in years.

The belief that the used machinery sector would prosper in times of economic crisis has been somewhat of a paradox. The economic slowdown over the past two years has had a profound impact on the retail price of new machinery, with reports of prices coming down by as much as 30%. Contradictorily; used machinery prices have resisted falling at the same rate and timing as those of new machinery; hence the gap between the respective asking prices has narrowed, making the price of used machinery less attractive than in previous years.

The main reason for this price depreciation is that whilst Used Machinery sellers base their asking price according to the book value; the price of New Machinery is determined according to supply and demand. When demand is high, prices are set at a lot higher than book value. When demand significantly decreases (e.g. due to economic crisis) then the prices of new machinery will be significantly lowered so as to shift the supply. These prices are lowered to such an extent that they are very close to the price of the book value that Used Machinery is being sold at. Moreover, for different sellers, the same machinery may yield varying prices because of different depreciation techniques used.

Factors that affect the demand vs. supply:

• Induction of new technology which can free up the machinery that utilises existing technology for the reseller market To a service-oriented brand integrity,As the professional manufacturer of complete sets of mining machinery ,like magnetic separator, Henan Hongxing is always doing the best in products and service.

•A shortage of new machinery in a particular market can make used machinery an attractive proposition

•Regulatory changes in one region can render old machinery non-compliant in that particular location, but retain its use in other markets.

Due to the aforementioned factors; price variation is evident throughout different regions in the used machinery market.

As a buyer you need to know if the used machinery you're interested in is offered to you at the right price. It is well advised to take the help of an experienced assessor who can place a tangible figure on the various aforementioned influencing factors. You can save an appreciable amount, and more importantly; get apprised of the best deal for you whilst it is available by choosing the services of a good broking firm.

A broker in the know will be able to quickly assess whether going for the cheapest machinery available is best suited for your needs. Very often it is not quite the right solution. Furthermore, an agency that specializes in buying and selling can judge and value the impact of a major technology advance on the price of existing technology; often the introduction of new technology can devalue used machinery much more than what the book value will suggest.

Within automotive, Sankovitch noted that in larger machines over 1000 tons clamp force, suppliers had been running presses with 15, 20, or more years on them, making sourcing of replacement parts a challenge, but one that was possible when older machines could be cannibalized for spare components. Those days seem to have passed.