Trading hours are 9:30 am to 3:30 pm (1:30-7:30 am GMT) with a two-hour break from 11:30 am. The benchmark trading price will be set based on the previous day's average transaction price.

The platform has more than 150 companies as members so far.

Angang Steel, which is a member of the platform, will put up to 30 percent of the company's iron ore for trade on the platform, said Li Daguang, deputy general manager of Angang Group International Trade Corp.

Foreign miners were adopting a wait-and-see approach.

"It is still too early to predict how much iron ore we will put into the platform for trade," said Luiz Meriz, president of Vale Minerals China Co Ltd.

"However, it has created a new way to look at ore prices, which is the key point of the platform and we are very happy to see that."

Vale Limited, the world's biggest iron ore producer, still sells its products to Chinese clients mainly via long-term agreements, but the platform will allow Vale to meet small-scale Chinese steel producers, Meriz said.

"We believe the new system will bring more transparency because prices are not created by the platform, but reflect real transactions," he said. "So, we are very supportive."

The China Iron and Steel Association has blamed "monopoly practices" by foreign miners for the surge in costs, and sees the new platform as a way to keep costs lower.

"The widely used Platts iron ore index is regarded with some skepticism as to its transparency and fairness by steel companies and iron ore traders from China, Japan and South Korea," Wang Xiaoqi, association vice-chairman, said.

He said the new platform will not allow financial organizations and banks to participate to avoid the speculation and will not trade iron ore derivatives either.

Chinese pressure

The platform will also rival the planned GlobalOre trading exchange which is backed by BHP Billiton and has offices in Singapore and London.

But some traders said market size gives China an edge.

"This platform is supported by the Chinese government,'' a Shanghai trader said.

With growth in Chinese demand for iron ore this year slowing, along with the overall economy, the pricing dynamic is changing to China's advantage.

"The supply and demand balance will change over the next few years and should see Chinese mills in a much stronger position whereas the last few years have very much been a sellers' market," said Christopher Ellis, a Metal Bulletin analyst.

Reuters contributed to this story.