With more dot-coms seemingly voted off the island each week, some of the surviving Web-based exchanges say they are doing just fine, thank you.
Bitter rivals ChemConnect Inc. and CheMatch Inc. both claim to have bucked the survival odds and actually prospered in 2000.
And although plastics Web trading still is in its infancy, the e-commerce stampede could be around the corner — if you believe dot-com officials.
"There is a whole herd behind the people who have used us,´ said Linda Stegeman, senior marketing vice president for San Francisco-based ChemConnect. The company claims to have done about $1 billion in transactions during 2000 from exchanges and auctions. About 16 percent of its members come from plastics-based companies.
Houston-based CheMatch claims it conducted about $382 million in transactions last year, said Clay Jeansonne, vice president of investor relations.
Neither company discloses how much volume was for resin. But both offer reminders that Web exchanges are about price. That reminder is especially poignant as material prices continue to rise.
Buyers play what Jeansonne termed "game theory." At CheMatch, that means private negotiations are held between a processor and supplier if no one first accepts the final online material offer.
But a second processor can break up those off-line negotiations by suddenly agreeing to accept the supplier´s last posted price.
At ChemConnect, officials once found a resin supplier in Mexico able to meet a processor´s demand in North America at a decent price. The company also groups customers together to buy in lots.
"We have no vested interest in price, so we can offer creative ways to improve a transaction," Stegeman said.
Now, both companies want processors to conduct futures trading for plastics commodities, buying a contract today to lock in a long-term price before it changes tomorrow.
CheMatch offers futures contracts now. By midyear, the company plans to guarantee those trades through the Chicago Mercantile Exchange. ChemConnect plans to add plastics commodities trading in the last half of 2001, Stegeman said.
That opens new doors, and marketing challenges, for exchanges jockeying for identity as the supplier with the lowest resin prices.
Pryweller, an Akron, Ohio-based senior reporter for Plastics News, covers e-business and mold making.
