The Baotou Rare Earth Products Exchange, China's first national trading platform of its kind, is expected to go into use on a trial basis in October.

Trading systems are currently undergoing internal testing and are expected to become operational in October, said Gu Ming, general manager of the exchange, at the ongoing fifth Baotou China Rare Earth Industry Forum.

The exchange will begin to recruit members starting from mid-August, Gu said. "There are many institutions and enterprises interested in our exchange and some have already contacted us," Gu said.

"Our exchange will also carry out market promotions to expand our influence," he said.

The exchange will handle spot trading for rare earth products and will not engage in any business related to futures. It is expected to introduce a rare earth product price index in the future, Gu said.

The exchange was officially launched on Aug. 8, 2012. It was initiated by Baotou Steel Rare Earth (Group) Hi-Tech Co., China's top rare earth producer, and another 11 firms and institutions with a registered capital of 120 million yuan (19.5 million U.S. dollars).

The exchange is located in the city of Baotou in north China's Inner Mongolia Autonomous Region, home to more than half of the world's light rare earth output.

Previously, China's rare earth market was largely opaque, as transactions were not made in public markets and always ran in small volumes. Only limited amounts of pricing and transaction data have been made available to the public.

China now supplies more than 90 percent of the global demand for rare earth metals, although its reserves account for just 23 percent of the world's total. The establishment of the exchange is intended to regulate the sector and strengthen its pricing power for the resources.

Rare earth metals, a group of 17 metals, are vital for manufacturing high-tech products ranging from smartphones and wind turbines to electric car batteries and missiles.