Right Place, Right Time for Digital Marketplace

Felux—a digital platform designed to allow users to connect, transact and manage their businesses with greater efficiency—is seeing explosive growth, said Hogensen. In fourth-quarter 2020, the company saw more than a 300 percent increase in new customers come to the platform. In the past 45 days, the site facilitated transactions totaling 300 million pounds, “and we are seeing activity accelerating into the new year.”

Sellers post both prime and nonprime material. “The secondary markets have been great,” said Hogensen. “Not many buyers are rejecting coils. They will cut out the bad spots and use what they can get. Suppliers are using our platform as a way to bid up prices. With how tight the market has become, secondary prices are now close to prime.”

Hogensen is not surprised at the volume Felux has drawn even though steel is so tight. “Many people come to Felux looking for anything at any price. They are beginning to rethink their distribution channel and supply chain, asking ‘how do we get access to more suppliers so we aren’t so reliant on just one or two?’ We’re helping to educate the market, advising people on digital strategies and new technologies.”

Hogensen was unable to offer any specifics on steel prices, as transactions are often completed offline, but he did note, “it’s absolutely insane how quickly people bid on this material and how quickly it’s gone.” Almost like cryptocurrency prices, he said, steel is seeing bumps of 5-10 percent in a single day. “I think prices will begin to stabilize in the next 30-45 days, but the swings will still be wild and people will still be struggling to find material.”

With hot rolled steel prices approaching record highs of $1,200 a ton, according to Steel Market Update data, many believe the steel market is nearing a peak and poised to drop, perhaps sharply. Hogensen believes ecommerce platforms like Felux are of even more value to buyers and sellers in down markets. “When prices are high, we are all at the mercy of the market. But when things are low, that’s when people find more value in better pricing, better logistics, better financing, etc. That’s why we like the platform model. We are an intermediary between the buyer and the supplier, helping them facilitate better transactions.”