NCDEX had re-launched commercial grade futures contract as ‘STEELCOMM’ on 11 Apr, 2014 with Wada (Mumbai) as delivery centre. Many questions arise about the sustainability of NCDEX steel futures contract this time around as well.
To know more about NCDEX steel futures contract, Steel 360 spoke to Mr. Adhish Singhal, Product Manager of NCDEX. Here is what he has to say about the sustainability of STEELCOMM.
Q. What are the major differences between the current & previous contracts?
A: There are three major changes which were made in the current contract. The differences are:
- Due to strong opposition by the industry, the BIS quality mandate is removed completely and now we are trading for commercial grade future contracts.
- Currently, the primary delivery centre is Wada, Mumbai (Maharashtra) instead of Mandi Gobindgarh.
- Earlier, there were a lot of additional centers; however in the new contract only a few additional centers are included.
Q. A couple of modification was made in Steel long on 04 May, 2009 & 19 Nov, 2013. What was the major reason for the modification?
A: The modifications were made to maintain uniformity between traders & manufacturers. Suppose a seller is selling Steel long at INR 300/MT and another seller is selling it at INR 800/MT, the buyer who is purchasing the material is not going to bear the additional charges which causes problem while trading. Hence to maintain better trading between the buyer & seller, there was need for modifications.
Q. Do you think the new contract for commercial grade will be successful? How is the response?
A: Yes, definitely, the new contract for commercial grade will be successful as I am in Mumbai now and currently, there is very good response. The reason is that there is good availability of the material in the market and also supply is high.