Baotou Steel Rare Earth International Trade Co will purchase praseodymium neodymium oxide, a rare earth element, for its reserve, a move aimed to stabilize the rare earth market, the Shanghai Securities News reported on Sept 20.

The purchase price will be no more than 900,000 yuan ($140,900) per ton, the newspaper said, citing a statement from the company.

The material qualified for the purchase must be produced by companies included in the government production plan and meet the quality standard, the report said.

The current market price for the element ranges between 820,000 yuan and 850,000 yuan per ton, the report said, citing figures from www.ruidow.com.

Praseodymium neodymium oxide is an important rare earth material and is smelt into metal praseodymium neodymium products which are widely used in rare earth downstream industries.

The move will effectively protect rare earth resources, maintain market stability and prevent price volatilities, the report said.

The Baotou Steel Rare Earth International Trade Co was set up by Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co, the country's largest producer of rare earth.

An executive from the Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co said the company has no clear plan of the amount it would purchase or how long it would continue to buy the material, the report said.

The company's share price rose 1.27 percent to 55.94 yuan at 10:22 am on Sept 20.