Online marketplace SteelBuy has had 67 live listings totalling over 1,000t since launching on 2 December, with 17 customers signing up, chief executive Terry Sargeant has told Argus.
Sargeant calls the platform an end-to-end solution for buyers and sellers. Once a seller lists material, the platform handles the whole process from payment to delivery. A buyer needs to list for alerts in the products they are interested in, and buy, with SteelBuy handling the rest of the process.
Smart-matching technology effectively puts the buyers and sellers together through the platform.
SteelBuy pays the seller on pre-agreed terms, regardless of whether it has been paid by the buyer — it has credit insurance to mitigate risk of non-payment. The process is anonymised, so that sellers can list as much material as they want without tipping off their competition. In a soft market, this enables sellers to try and move as much as possible without signalling that they have a stocks issue.
The platform also enables sellers to have a "dynamic" approach to pricing — they can price material differently if they have nine interested buyers than if they have one or two.
Sargeant calls the platform an "asset-light" business in an asset-intensive industry. While it handles logistics — and will handle processing at a later stage — it does not have its own trucks or equipment, and it is not financing or holding stock.
The initial idea for the platform was to handle slow-moving, distressed stock. It was initially called SteelBay. Now it handles prime material too, with service centres, traders and a mill all listed on the platform. Sellers of prime material must upload a test certificate, which will be anonymised. SteelBay currently focuses on carbon steel coils and plate, but will roll out to other products and metals.
Germany's Thyssenkrupp is the sole financial investor in the platform. It has committed ￡22mn ($27mn) to launch and develop the UK version of the site, which will be a pilot, and ￡46mn for expansion into the European market. Sargeant has resigned all of his directorships in Thyssenkrupp Materials' businesses, and SteelBay has separate technology systems and platforms to ensure that no data can pass between the two. While Thyssenkrupp is the only investor, the business is run independently.
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