New Delhi, Nov. 11 -- National Commodity & Derivatives Exchange (NCDEX) on Wednesday launched steel scrap futures, the country's first futures contract in the segment to be based on a price-reporting agency benchmark, aiming to give steelmakers and traders a way to hedge price risk.
The contract is based on HMS 80:20, a widely used import grade consisting of 80 per cent heavy melting scrap grade 1 and 20 per cent grade 2, and is a benchmark across Asian markets, the exchange said in a statement. Prices will be referenced to assessments by BigMint Technologies, which has signed a memorandum of understanding with the exchange to act as the price reference agency.
The contract has a trading unit of 10 tonnes and a maximum order size of 500 tonnes. The tick size is Rs 10 per tonne, and the contract will be cash-settled against a basis centre of Mandi Gobindgarh, Punjab, excluding goods and services tax. India's steel scrap market is fragmented, with prices varying by region and grade, NCDEX said.
"Steel scrap is an increasingly important component of India's steel value chain... Yet its price risk has had no exchange-traded answer," NCDEX Managing Director and Chief Executive Vikas Goel said.
Published by HT Digital Content Services with permission from Millennium Post.