Steel Long future contract re-launched with BIS 2830 grade by NCDEX.
National Commodity & Derivatives Exchange Ltd (NCDEX) has re-launched its Steel Long future contract based on the Bureau of Indian Standards (BIS) 2830 grade. NCDEX, the only exchange offering steel long futures, has become a benchmark price reference for the long products in Steel industry of India.
NCDEX’s contract of Steel Long future made earlier in Mar, 2005 was discontinued in Sept, 2012 when the Government made the BIS norms mandatory. Government aimed to motivate the Steel industry towards implementation of the BIS norms and thereby provide quality Steel products to its consumers.
“Steel is the second most traded physical commodity after energy. In fact, as consumers of Steel products, it is an integral part of our daily lives. With the re-launch of the NCDEX Steel Long contract, we expect it to add tremendous value to the existing Steel business entities and stakeholders,” NCDEX MD in-charge, Samir Shah said.
The new Steel Long future contract launched by NCDEX is based on BIS 2830 grade. The new contract will help recover Steel prices and also cover the entire Steel production chain of India. This is also in relation with the production rate of Ingot and Billet in major and secondary Steel industry of the country. It will also transfer the secondary Steel towards early adoption and production of BIS 2830 grade.
The contract will also help the consumers and producers of Steel to stabilize their prices with additional benefit of the opposing parties risk mitigation provided by NCDEX. The exchange will also simplify the physical delivery of Steel at its approved warehouses.
The delivery will be done majorly from seven centres namely Mandi Gobindgarh, Ghaziabad, Mumbai, Raipur, Hydrabad, Jaipur and Kolkata. The contract provides choice between direct delivery or from the approved warehouses of NCDEX.
Seshagiri Rao, MD and Group CFO at JSW Steel said about the contract that, “The steel futures introduced by NCDEX will help all stakeholders in the industry. We will be happy to use this platform for price discovery and hedging. There is a huge scope for industry to benefit from this futures trading platform as the government aims to raise the country’s Steel production to 300 MnT in the years come. Presently, India produces 80-90 MnT, against the capacity of 100 MnT.”
NCDEX is an online Indian multi commodity exchange incorporated on 23 Apr, 2003 under the Companies Act, 1956. It is the second largest bourse in India after the Multi Commodity Exchange (MCX ). Presently it offers future trading in agricultural commodities and is expanding towards non-agricultural commodities trading.