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E-commerce gives leg-up to ailing steel industry

(Xinhua) Updated: 2014-05-26 11:14

BEIJING - A flurry of online trading platforms have been launched as Chinese steel companies hope that branching into the Internet sphere will boost sales and help them weather the hard days.

China Minmetals Corp (CMC), the country's largest steel trader, on Tuesday opened its e-commerce platform, www.xinyilian.com. It is the latest foray into e-commerce following the establishment of more than 100 such platforms by steelmakers and traders across the country since last year.

The Xinyilian platform will link commodity buyers with sellers and gradually become an online steel supermarket, said Yu Engang, deputy general manager of Minmetals Development Co Ltd, a subsidiary of the CMC group.

"During hard times, the steel sector must build an open and standard e-commerce platform," Yu said.

Despite its much-touted advantages -- transparency, efficiency and lower cost, analysts have said that bringing steel trading online is far from being a solution to China's ailing steel industry.

A ray of hope

The steel industry is bogged down in the mire of overcapacity, excess supply and sagging prices amid the economic slowdown.

Steel companies posted combined losses of 2.33 billion yuan ($380 million) in the first quarter, compared with profits of 8 billion yuan a year ago, according to China Iron and Steel Association data. More than 45 percent of steel companies reported losses as economic growth dipped to 7.4 percent in the first quarter, the lowest level since the third quarter of 2012.

As such difficult times are set to continue since the leadership resolves to cut reliance on heavy industry for quality growth, steel companies have turned to online trading platforms with the aim to streamline distribution.

E-commerce gives leg-up to ailing steel industry

E-commerce gives leg-up to ailing steel industry

Steel traders look to the Internet Grouppayingnearly$6bforstakeincoppermine

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