Mumbai (Maharashtra) [India], Jan 14 (ANI): The National Commodity and Derivatives Exchange (NCDEX) will relaunch steel futures contract on January 18, re-entering the non-agri space and expanding its bouquet of derivative products.
The contracts will initially be available for months expiring in February, March and April.
The steel contracts will trade long steel products like ingots and billets having a trading unit of 10 tonnes. The basis centre will be Gobindgarh in Punjab while Ghaziabad in Uttar Pradesh will be the additional delivery centre.
NCDEX Managing Director and CEO Vijay Kumar said the steel contracts will provide a reliable and transparent risk management tool to hedge against volatile prices.
As the price of steel is a major component of total cost in many infra-projects, developers find it difficult to manage the volatility in steel prices in absence of an appropriate hedging platform.
Kapil Dev, Executive Vice-President and head of business and products at NCDEX, said India's steel consumption is likely to grow at a much faster pace as over Rs 44 lakh crore worth of projects are already being implemented out of Rs 111 lakh crore National Infrastructure Pipeline (NIP).
Even domestic production and exports are also on the rise at a brisk pace. On the other hand, logistical and supply inefficiencies have made steel and its raw material prices extremely volatile, posing challenges to the entire value chain participants.
"In view of this, having a steel futures contract at this point of time has a tremendous utility for producers as well as consumers to manage their price risks," he said. (ANI)