MetalSite Inc., the Pittsburgh-based electronic commerce platform, has suspended steel sales indefinitely and laid off its 72-person staff while executive management negotiates with potential investors to buy and re-launch the Internet site. Also shut are sales at the ScrapSite subsidiary.

Doug Schuster, marketing vice president, says sales volume—mostly from mills to service centers—grew consistently but MetalSite has not been able to generate enough revenue to cover costs. In 2000, its second year of existence, MetalSite conducted 50,000 steel sales, up from 9,000 deals in 1999. ScrapSite was launched a year ago and claims to have made scrap iron sales worth $60 million.

The www.metalsite.net Web site remains live as a steel news source in anticipation of new investment or ownership, but no commerce is being conducted. MetalSite's majority owner is Internet Capital Group of New York. Its other equity partners are steel companies Weirton Steel Corp., LTV Corp., Bethlehem Steel Corp., Steel Dynamics Inc. and service center giant Ryerson Tull.

Meanwhile, MetalSpectrum, the Atlanta-based online specialty metals marketplace, has ceased trading because it ran out of cash and backers pulled the plug. "Despite the large expenditure of both effort and money, the user acceptance rate has been minimal and no revenues have been generated," MetalSpectrum said in a statement. In effect, buyers of the specialty metals have been unwilling to switch business to marketplace from such traditional outlets as the London Metal Exchange, trading house or sales personnel at mills and service centers.

MetalSpectrum's backers included Alcoa Inc., Allegheny Technologies Inc. and its Allegheny Ludlum and Allvac divisions, A.M. Castle & Co., Chase Brass & Copper Co., North American Stainless, Kaiser Aluminum Corp., Thyssen Krupp and others. Alcoa and its fellow shareholders declined to comment on the collapse of MetalSpectrum, in which they are believed to have invested between $30 million and $40 million. The collapse of MetalSpectrum is Alcoa's second e-commerce failure this year, following the April collapse of MetalMaker, in which the world's largest aluminum producer had also invested. Alcoa, however, will take over MetalSpectrum's software, which it will use to power an Internet sales outlet.