China launched its first ever commodities exchange center for rare-earth elements in a bid to diffuse global perception on alleged monopoly on the elements.

The Baotou Rare-Earth Products Exchange started trading on Friday, a few days after the World Trade Organization thumbed down China's policy on limiting the extraction and sale of rare-earth metals to the world due to China's perceived environmental concerns.

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The exchange, located in Inner Mongolia, aims to leave the trade of rare-earth to free market as opposed to accusations of bias in favor of Chinese industries.

The first items for trading included cerium oxide,  europium oxide and praseodymium-neodymium oxide. The daily price movement is anchored on the yuan. Physical delivery on the first day of trade was pegged at 15 per cent but in succeeding trading days, it will be limited only to six percent.

The new exchange aims to bring together miners and refiners of seventeen chemically similar elements that are in demand in the manufacture of finished goods like smart phones, hybrid car batteries and solar panels.

Over 90 per cent of the world requirement for rare-earth elements are sourced from China but in year 2007, Beijing implemented restrictions citing reasons such as conservation of limited resources and concerns on environmental damage. This policy soured relations with the United States, the European Union and Japan.