After the enormous success of spot transactions, Metalshub launches a new feature enabling long term contracts. The digital platform for buyers and sellers of metals and ferroalloys thereby continues to bring digital innovation to a traditional market and build the metals marketplace of the future.
The new feature of the trading platform provides two new elements that simplify negotiations for long term contracts. First, the multiple deliveries feature enables buyers to specify the total quantity of material with the possibility to include volume optionality. Additional settings include the number of deliveries as well as the respective delivery period / call offs.
Second, the new index based contract feature allows buyers to choose from multiple indices in the market and thus define the index they want to base their contract price on. The pricing formula can be filled in percentage-based and/or in absolute values (e.g. index -3% +0.10 $/kg).
“It was our main goal, to provide another value-adding service to our users that is as easy to handle as our whole marketplace.”, explains Dr. Frank Jackel, Co-Founder and Managing Director of Metalshub who is taking care of the user-oriented product development. “We are also working on the possibility for buyers and suppliers to manage contract volumes through the contracting period.”
By enabling long term contracts, Metalshub expands its services and is taking another step towards the team’s vision: To reduce transaction costs for commodities which are not traded over a liquid exchange such as ferromolybdenum, ferrochrome, ferrovanadium or manganese alloys. The platform is constantly growing and expanding its international footprint in the metals and mining industry.
20 months after launch, more than 600 producers, consumers and traders of commodities from over 50 countries have registered, including industry leaders such as Outokumpu, Saarstahl, Gerdau, Traxys, Euromet, Hempel Intermétaux, Rio Tinto, Glencore and Anglo American. To date, over 2,500 negotiations have taken place on the platform and the volume of concluded binding contracts has reached $90 million. The number of users is growing steadily as the first big metal consumers have decided to use the new long term contract feature for all their 2020 annual agreements.
“Moving to the platform enables us to tender and close agreements digitally rather than with significant amounts of paperwork and administration”, tells Shaun Lindfield, Head of Procurement at MAT Foundry Group LTD. “I feel that the long term option is an excellent way for MAT Group Foundries to significantly reduce its administration outlays and create a more efficient process.“
The platform currently offers 17 product categories; Boron, Chrome, Cobalt, Copper, Manganese, Molybdenum, Nickel, Niobium, Phosphorus, Pig Iron, Recarburiser, Silicon, Sulphur, Tin, Titanium, Tungsten and Vanadium, each metal with multiple subcategories. Next to the above mentioned features, the team also plans to expand its products portfolio as more companies join the marketplace. The ambitious goal is clear: to become the leading platform for the global metals and ferroalloys community.