Steel traders look to the Internet

As the largest raw material supplier in the country, the CMC group hopes to repeat the success of Alibaba Group in operating third-party e-commerce platforms such as Taobao and Tmall, improving transaction efficiency and access to information.

Only 10 percent of China's steel transactions go through e-commerce platforms.

However, the e-commerce rush among steelmakers and dealers has worried some.

"It's unnecessary for everyone to launch their own e-commerce platform, trading company or logistics park," warned Liu Leiyun, president of China National Association of Metal Material Trade. "Otherwise, it will become another overcapacity problem."

Overcapacity has long been a problem for China's steelmakers, which have not only been blamed for polluting China's air, rivers and soil, but for impeding economic restructuring.

Data from the China International Steel Congress showed the steel industry now has an excess capacity between 180 million tons and 240 million tons.

Dong Baoqing, an official from the Ministry of Industry and Information Technology, sees e-commerce as a good way for the steel industry to win back trust from banks, burned by steel companies embezzling credit for speculative purposes.

"A reliable platform could reduce risks to controllable levels and facilitate the healthy development of the sector," Dong said.

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