U.S. Steel Finds B2B E-Commerce Riveting

U.S. Steel Group, one of the United States’ oldest industrial companies and easily its largest steel manufacturer, is joining the online business-to-business (B2B) revolution by committing to sell its prime and non-prime steel products on the e-Steel Exchange.

U.S. Steel has also made an undisclosed investment in the Exchange’s owner, the privately-held e-Steel Corporation.

Exchange Already Has 1,341 Members

The Exchange already has 1,341 member companies from 65 countries, including 80 steel mills, 304 service centers, 353 fabricators, 149 distributors and 101 major original equipment manufacturers. The Exchange is used primarily to buy and sell prime and non-prime steel products, including hot rolled, cold rolled, coated, plate, tin and rebar.

The e-Steel Exchange uses a proprietary technology, called SteelDirect, that uses e-commerce software from BroadVisionThe company says that SteelDirect provides users with the ability to target specific groups for conducting business online, and also provides each user with the security to block sensitive commercial information from competitors and other selected members.

Security Protects Sensitive Information

According to the company, “This technology provides members with the comfort of knowing that sensitive information will never be visible on the e-Steel Exchange to selected companies.”

“Within the e-Steel Exchange, each member controls the distribution and accessibility of its online information,” the company adds. “For example, a company can ensure that all postings are always blocked from its selected competitors. At the same time, if desired, a member can selectively make a specific order available to that competitor for a ‘one-off’ requirement, providing the flexibility that this competitive, price-sensitive industry requires.”

e-Steel has raised more than $55 million (US$) to develop its online trading network. Investors include Goldman Sachs, Paul Allen’s Vulcan Ventures, GE Capital, Amerindo, Mitsui & Co. USA, and Mitsubishi Corp.’s MC Capital.

As the largest U.S. steel manufacturer — with revenues of $5.3 billion last year through the sales of 10.6 million tons of steel products — U.S. Steel becomes eSteel’s largest trading company.

Deal with U.S. Steel Sister Company

As part of the arrangement, e-Steel entered into a related agreement with U.S. Steel sister company USX Engineers and Consultants, Inc. for marketing and implementing system integration services. Both companies are owned by industrial giant USX Corporation.

On the marketing side, e-Steel’s sales and marketing staff will get help from USX’s relationships in the commercial steel industry. On the system integration side, USX software experts will work with e-Steel Exchange buyers and sellers to help them connect their back end business systems to the Exchange to improve supply chain operations.

U.S. Steel also believes that it can develop more customers by becoming a major seller of prime and non-prime products on the Exchange if its USX sister firm makes it easier for prospective customers to integrate their back end processing systems into the Exchange.