Reducing transaction costs for commodities which are not liquidly traded over an exchange such as cobalt, ferrochrome, ferrovanadium or manganese alloys – this is the vision that drives the team of Metalshub, a digital marketplace, where physical metals and ferroalloys are efficiently bought and sold. While the platform grows, it simultaneous continues its internationalisation journey.
“When we launched Metalshub in December 2018, our focus was on companies based in Europe. But the commodity markets are global.”, tells Co-Founder and Managing Director Dr. Sebastian Kreft. “That is why we quickly built up an international team of 25 colleagues from six different countries and our platform now runs in 8 different languages.”
20 months after launch, more than 600 producers, consumers and traders of commodities from over 50 countries have registered. Producers come from all over the world, such as JDC and V-Resource from China, Anglo American from the UK/South Africa, Rio Tinto from Australia, Grupo Maringa from Brazil, Glencore from Switzerland, Eramet from France, Balasore from India and Molymet from Chile.
The growth of Metalshub has been exponential. To date, over 2,000 negotiations have taken place on the platform and the volume of concluded contracts has reached $90 million. This is impressive given that the metals and mining industry is conservative. Still today the majority of negotiations are conducted over the phone without the support of any digital tools. A fact, Metalshub wants to turn around with its solution. “The majority of commodities are produced in mining countries such as Australia, South Africa and Chile and consumed in China, the EU and the USA. We have designed an intuitive platform which makes previously complex international transactions faster and more efficient. Sellers can find new customers at very low customer acquisition costs and Metalshub offers tools to better manage credit and performance risk,” explains Co-Founder and Managing Director Dr. Frank Jackel.
And the platform is well received, Metalshub’s users are happy with the new channel to the market. Claire Wang, Marketing Manager of the Chinese manganese producer, V-Resource Ltd. states: “We have received many messages and alerts on a daily basis from Metalshub announcing new customers and new opportunities that we had not known before, this is great! It brings us new opportunities to expand our business.”
In order to provide a reliable solution, only pre-checked companies are allowed to trade on Metalshub. Therefore, it is not surprising that almost every transaction went smoothly. In 98% of the transactions the buyer paid on time and in 97% of the transactions, the seller delivered within the agreed period and quality.
The platform currently offers 16 product categories; Boron, Chrome, Cobalt, Coper, Manganese, Molybdenum, Nickel, Niobium, Phosphorus, Recarburiser, Silicon, Sulphur, Tin, Titanium, Tungsten and Vanadium, each metal with multiple subcategories. It plans to expand its products portfolio, as more companies join the marketplace. “In 2019, our focus will remain on expanding our user beyond Europe. Asia Pacific is one of our focus regions.”, says Kreft. “Therefore it definitely helps that one of our board members is based in Sydney, Australia to help us connect with the relevant companies.”
Mr. Eduardo Ferreira, CEO of Wedgebloom Pty Ltd, a Sydney-based investment advisory firm, is a board member of Metalshub. Wedgebloom is a member company of the German-Australian Chamber of Industry and Commerce.