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However, online platforms are nothing new for the steel industry as many companies experimented with going online a decade ago. But these platforms did not come into their own then as demand easily exceeded supply and steel companies felt no need to seriously explore e-commerce.

"With the industry in a slump and supply outstripping demand, steel traders and customers can now both benefit from e-commerce, providing a better opportunity for these online platforms to expand," said Liu Changqing, CEO of Langesteel.com, an active online third-party trading platform. The company expects to sell 2 million tons of steel this year, compared to 700,000 tons in 2013.

Another company, Zhaogang.com, one of China's biggest online platforms, sold around 60,000 tons of steel in a six-day "shopping carnival" earlier this month. The company targets 3 million tons this year.

Only 10 percent of steel transactions go through e-commerce platforms, but analysts expect the figure to grow as high as 30 percent in the years to come.

NOT A PANACEA

While e-commerce trading platforms are catching on and offers a direction for steel companies, analysts have said that they are not a cure-all and advised caution against an unbridled e-commerce rush.

"An e-commerce platform may be an effective way to sell standard and uniformed steel products but they cannot meet the needs of users who require custom-made products," said Cheng Ming, professor of new steel technology research institute of Wuhan University of Science and Technology.

"The biggest challenge facing the steel sector is still overcapacity. Even though some steel makers may win some time with the help of e-commerce platforms, the possibility of being written off the map amid industry restructuring is still there," he added.

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

Analysts have called for innovation and upgrading, saying these are key to the survival of steel companies in the long run.