Despite the slump that hit e-marketplaces last year, a new industry-run trading exchange serving the steel industry has gone live.

The new Steel24/7 e-marketplace was launched jointly by steel vendors Arbed/Aceralia, Corus, Thyssenkrupp Steel and Usinor, running on software from Asera.

But Steel24/7 is distancing itself from the e-marketplace label.

"We do not call ourselves a marketplace. We intend to be a communications service between players in the steel industry. We are allowing direct ERP connectivity between buyers and sellers," said Paul Gourlet, chief technology officer of Steel24/7.

The trading exchange gives customers a single, secure place on the web where they can ask for quotes from one or all of the member suppliers, place orders, view specifications of materials, and track and trace orders from any of the manufacturers throughout an order's lifecycle.

Membership of the exchange is open to anyone in the steel industry and suppliers are charged a fee to join.

"The current platform provides visibility of information for customers and the next phase is to enable transaction services," said Gourlet.

An e-marketplace is an online community where groups of buyers and suppliers meet to carry out the sale and delivery of goods. Although they have initially been used as a means of pushing down prices through reverse auctions, they have the potential to reduce costs for both buyers and suppliers by making processes more efficient.

"The collaborating organisations are seeing significant reduction in cost as a direct consequence of improved supply chain management," said Kevin Leslie, vice president of Northern Europe for Asera.

Analysts believe that the e-marketplace model still makes sense because it uses technology to improve communications.

"There is a firm development towards private marketplaces because these are about plugging technology into existing business relationships," said Alan Lawson, research analyst at the Butler Group.

"Using technology to enable efficiencies in existing relationships is an obvious way to go.

"In the short-run private market places will predominate. Surviving public marketplaces should look at web services. Web services will benefit marketplaces in 2002 because the technology brings together processes on the fly."

Speed of implementation was key in Steel24/7's choosing Asera software.

"We selected Asera over other software companies because Asera best demonstrated capability and willingness to execute within very short time lines," said Gourlet.

The new marketplace will initially concentrate on European rollout but there are plans to expand globally offering multi-lingual functionality. The trading platform is currently accessible in five languages.