The future of metal trading is digital
Steel and metal products are being traded via digital channels to an increasingly frequent extent. For the metal industry with its long tradition, where fax and telephone continue to play an extensive role, digitisation is not simply a cultural upheaval – it represents disruption of the existing business models. For decades, steel was bought in large quantities as inexpensively as possible and stored. It is not, however, possible to buy steel cheaply and sell it expensively any more, since structural excess capacities all over the world – particularly in China – are flooding the market and depressing prices. Experts think that the future of steel trading lies in three digital channels: proprietary shops operated by individual distributors, industry-specific platforms and cross-sector marketplaces. Three groups of players are attacking the traditional metal trading business with digital strategies: the steel companies themselves, innovative material traders and newcomers from the start-up community.