Chicago April 11, 2001 GSX, the global steel exchange founded last year by some of the largest steel trading companies, opened its site for pilot trading today, completing its first trade within hours.
Chicago-based GSX was founded last May by Cargill Steel, (Minneapolis, Minn.), Duferco (Lugano, Switzerland), Samsung Corporation (Seoul, Korea) and TradeARBED (Luxembourg). Strategic investors include 12 leading steel producers.
Under the pilot, expected to last about five weeks, steel buyers and sellers in 35 locations throughout the world can begin trading products across GSX. The pilot's purpose is to ensure that all technology and operational processes work smoothly before the site opens to the entire international steel industry. Companies participating in the pilot, include the largest producers in Brazil, Russia and Ukraine, will buy and sell an array of products, including: stainless, pig iron, wire rod, hot and cold-rolled coil, rebar, plate, billets and bars.
GSX's first trade, initiated this morning shortly after the exchange opened, involved 12,000 tons of Russian billet between Duferco (Switzerland) and Steel Asia (Manilla, Phillipines). "In the steel world, that's a healthy trade," noted GSX spokesperson Joelle Ziemian. "The average transaction of one of our major competitors is half that."
GSX offers both a product and a services exchange, and it lays claim to the title of the world's first online international steel trading marketplace. Participating steel companies have committed volume totaling U.S. $5 billion over two years. Exchange members can directly negotiate for more than 50 products as well as trading services.
Founders, investors and selected steel companies will participate in the pilot trading. They will conduct simple to complex transactions, involving multiple lots with different product grades and logistics. There is no limit on the number of transactions a company can initiate, nor on the tonnage that can be traded, according to GSX, which expects the average transaction to be 3,000 tons.
Commenting on the launch today, Lou Schorsch, GSX CEO, said, Although the pilot is officially a testing period, transactions conducted during the pilot are real. Buyers and sellers will exchange products and money in some cases, a lot of both.
The GSX trading pilot is expected to last approximately five weeks. The entire industry will be able to register and trade online in May.
In addition to GSX founders, companies participating in the pilot include: CSN (Sao Paulo, Brazil); Severstal (Cherepovets, Russia); Metals USA (Granite City, Ill.); Lee Yip Metal Co. Ltd. (Kowloon, Taiwan); Samwon Precision Metals (Seoul, Korea); Dae Kyung (Seoul, Korea and Singapore); and Azovstal (Ukraine).