The auction industry is starting to reveal green shoots of recovery this spring after four years’ of downturn in the sector since a period of adjustment began in 2012. The spring auction sales volumes for multiple auction companies are now seeing double-digit rates of growth. Most remarkable of all, the sales volume for Council International, which is celebrating its 10th anniversary this year, reached RMB 2,558 million, nearly 1.5 times greater than earnings at last year’s spring auction.

Sales prices for 40 single items exceed ten million in Council spring auction

The spring auction during the tenth anniversary of Council International was held on the first floor of Beijing International Hotel between the 6th and 8th of June. There were 31 special sessions in the season’s auction series and more than 3,700 fine works were shown, including Chinese paintings, Buddha figurines, china, modern and contemporary oil paintings and sculptures, dark-red enamelled furniture, Chinese stone carvings, jewellery, and watches. Valuable items were presented one after another at the spring auction as part of the 10th anniversary of Council International, resulting in a veritable feast for collectors from all corners of the country.

All seats were occupied by every kind of collector at the Council auction

After three days’ of fierce battles, many collectors went home with stronger collections and many auction items created new records. Jiang Tingxi’s Album of One Hundred Peonies was auctioned with the starting price of RMB 15 million and saw fierce competition among collectors; the bid price kept rising to a final hammer price of RMB 151 million. The hammer price including the commission was RMB 173.65 million, creating a new auction record for his personal work; it was also the most expensive single auction item at the 10th anniversary spring auction.

The hammer price of Jiang Tingxi's Album of One Hundred Peonies: RMB 173.65 million

Besides Jiang Tingxi, the works of Ding Yunpeng, Gong Xian, Wang Shouren and so on created new records at the Council spring auction. Calligraphy works by Wang Shouren and Ding Yunpeng’s Shaoling Qiuxing Picture both set new personal records for the artists, while Gong Xian’s Running Script Self-Written Poem created a new record for the artist for calligraphy works.

Looking at sales volume, Council’s 10th anniversary spring auction took in RMB 2,558 million in total over three days, with a growth of 137% over last year’s spring auction (which was RMB 1.08 billion). Meanwhile, Council registered a strong performance in single item transaction volumes and single session deal close rates. There was one auction item with a transaction price exceeding RMB 100 million and 39 auction items had a transaction price exceeding RMB 10 million. All of the auction items sold in “The Legacy of Zhang Daqian: His Daughter’s Collection”, “Jin Shi Calligraphy Jicuiyuan Collection Special Session”, “The Guoxiangguan Collection: Valuable and Rare Aged Liquors”, and “Cheng Dao: Qing Palace Painting and Calligraphy Evening Session”, a tremendous achievement. In addition, the evening tea session which was launched for the first time took in RMB 68.81 million.

Dong Guoqiang, Chairman of Council International said that Council International planned the spring auction of the tenth anniversary very carefully. The spring auction lived up to expectations, came to a successful conclusion and achieved remarkable results. “The artwork market will always have a recovery phase. The overall strengths of ancient paintings and calligraphy have become more and more apparent, starting from this year.”

Double-digit growth rates for spring auction sales at many houses

In fact, compared with last year, many auction companies have seen strong results at their spring auctions this year and a number continue to see growth rates in the double digits.

According to data from several major auction companies in Hong Kong, Sotheby’s in Hong Kong saw a jump in growth at this year’s spring auction with sales as high as HKD 3.1 billion, increasing by 17% on last year’s spring auction. The total volume of transactions at Poly Auction Hong Kong reached HKD 1,267 million, an increase of 15% on last year’s spring auction sales of HKD 1.1 billion.

Meanwhile on the mainland, sales in the 2016 spring auctions at Beijing Poly reached RMB 2.85 billion, of which one auction item sold for RMB 100 million and 47 other auction items took in more than RMB 10 million each. Total sales for China Guardian in the 2016 spring auction reached RMB 2,188 million, an increase of 17% compared with last year’s spring auction which took in RMB 1.87 billion. Year-on-year growth in transaction volumes for mainland companies such as Beijing Dongzheng and Beijing Chengxuan exceeded 10%.

Making a general survey of this year’s spring auction results, many auction companies have seen large increases compared with last year. Some experts expect that compared with 2015, significant growth in transaction amounts in the 2016 spring auction seems to be a foregone conclusion and recovery in the market has clearly surpassed that of last year.

An analysis by Ji Tao, a researcher at the Auction Research Centre at the Central University of Finance and Economics, shows that in the first and second round of spring auctions this year, sales volumes at a number of auction companies on the whole registered a certain amount of growth compared with last year. Looking on the ground at auction houses, the number of visitors and bidders increased significantly and the transaction rate increased slightly.

One auction industry insider said that even if the industry recovers, competition in the sector will only become more and more intense. “It is increasingly difficult to collect the rarest or finest goods, but major auction houses with enough muscle and a strong brand will find it easier to collect good auction items, and those items will serve to further improve the company’s position in the industry.” The insider revealed that in this competitive environment, factors such as branding, operational strength, trustworthiness and financial liquidity will impact future growth for auction houses.

It’s worth noting that at the beginning of April this year, listed company Hiteker announced its plan to acquire 100% equity in Council International. Ji Tao noted that if the acquisition goes through, Hiteker will be able to provide the company with a range of resources. Council International may be able to receive support for expansion in internet auctions and the mainstream art market and to consolidate its position as a leading player in the auction industry.

One person with an investment background disclosed that the acquisition was mutually beneficial to both parties. “If the acquisition is completed, Council International’s spring auction results, which have beaten expectations, will also boost the performance of the listed company.”