ISteelAsia.com has agreed to take a 3.5 per cent stake in London-based steel trader Stemcor for US$3 million, in a deal that would boost the turnover for the online steel exchange. The HK$23.4 million cash investment gives iSteelAsia a strategic interest in Stemcor, and the company has an option to increase its investment in the traditional steel trading firm. As part of the agreement announced yesterday, Stemcor has committed to trade at least 750,000 tonnes of steel products through iSteelAsia.com in the six months following the completion of its investment, expected on December 29. In addition, Stemcor hopes to trade at least an additional 750,000 tonnes of steel products in the nine months thereafter. Growth Enterprises Market-listed iSteelAsia.com provides an online trading platform for steel buyers and sellers. Chairman Andrew Yao Cho-fai said the partial diversion of Stemcor's offline business to the portal would increase its transaction volume. 'We anticipate a boom in our turnover and this will . . . enhance our commission income. The greater usage of the portal will translate into declining fixed costs per transaction, resulting in higher profitability,' Mr Yao said.
