Gan Yong, president of the Central Iron & Steel Research Institute. [Photo/China Daily]

An official has called for upgrading in China's iron and steel industry, to take the opportunity of the government's Made in China 2025 initiative.

"An intelligent steel industry platform supported by big data can not only help to eliminate overcapacity but also optimize the industrial structure and increase industry profits," said Gan Yong, president of the Central Iron & Steel Research Institute and chairman of the Chinese Society for Metals.

The platform is a commercial ecology system jointly built and operated by several companies, which share resources and profits, he said.

The academician of Chinese Academy of Engineering has called for the establishment of three big data platforms in China: the Yangze River Valley steel platform, the Bohai-Rim steel platform and the Southwest steel platform.

"If a company were on the platforms, it could survive. Otherwise, it will die."

"We have long been talking about intelligent production process within a company, however, intelligence in the whole industry is more important," he said.

"An intelligent internet platform is the best and effective way to solve the problems in the pillar industry in China."

There are many individual steel companies in China, which lead to fierce competition and a waste of resources, while mergers and acquisitions between giant corporations are not easy and may bring huge financial burdens, Gan said.

Normally, when the prices are comparatively high, all companies produce a large amount to make more money, which leads to overcapacity and plummeting prices.

The phenomenon is normal in some sectors in China, especially in cyclical industries, such as iron and steel, coal and nonferrous metals, because producers do not know how much should be manufactured.

The big data system solves the problem through capacity utilization adjustment. Cloud calculation gives the participants clear advice on the production variety and specific levels of production, eliminating blind production and arranging output capacity reasonably, he said.

"Setting up intelligent platforms is a central course: they join as a group, but they are independent in finance, management and staff."

Companies on the platform can cooperate with upstream and downstream firms, as well as former competitors, he said.

Sharing resources and information in supply-chain, design, manufacturing and service, they achieved a win-win situation, he said.

For instance, steel companies can bargain jointly with domestic and foreign iron ore providers like international giant Rio Tinto and BHP Billiton, reducing costs to the lowest level, he said.

The two conglomerates and Vale of Brazil are the three biggest iron ore suppliers in the world, which control the prices of the black metal.

In addition, the platform can easily realize industrialization for technological achievements, and provide financial support for research and production, said Gan.

"Of course, we still need some time to set up the intelligent platforms, but steel giants should realize their necessity, feasibility and urgency, with advance of the technology," he said.

China has already become a powerful country in the global steel industry, Gan added.