New Delhi, March 27 (IANS) Brass futures received a good response after the MCX formally launched the first alloy for futures trade globally on its platform. The contracts have been launched for April, May, June and July, of which April contract received very good response.
Brass for delivery in April settled up Rs 2.35 or 0.06 per cent at Rs 345.85 per kg while it opened at Rs 345 and traded in a range of Rs 341 to Rs 348 per kg in its first session. The total volume traded was 579 tonnes with open interest lots of 63 and value of Rs 19.90 crore.
However, the May delivery contract closed down Rs 16.60 or 4.04 percent at Rs 347.20 with traded volume of only two tonnes.
“It will further gain in coming sessions,” said Vijay Kedia, Director, Kedia Commodity.
Since brass is an alloy of copper and zinc, brass futures will receive directions from copper and zinc traded in major commodity exchanges across the globe, he added.
“Futures trading in brass will help stakeholders to hedge their price risk and boost the value chain in the industry,” an official of the Multi Commodity Exchange Ltd (MCX) said.
The contract specifications and deliverable grade(s) are such that it would help the entire value chain of brass industry, right from the scrap importer to the final product manufacturer to use a benchmark price acceptable within the industry to hedge their price risk, the official added.
The estimated annual production of brass in India is close to 250,000 MT.
India imports huge quantities of brass scrap from the US, the Middle East, Africa and Europe which is then separated and recycled to make brass. India also imports copper and zinc scrap which are also used to make brass. India exports brass items to Europe, the US and the Middle East.
India imported 1.5 lakh tonnes of scrap in 2015-16 and exported 32,912 tonnes of brass in that year, as per commerce ministry data.
Brass is mostly used in buildings and construction, electrical industry, sanitaryware and hardware, automobile and auto component industry, defence industry, pumps & valves, handicrafts and utensils.
In India, the brass industry is mostly located at Jamnagar in Gujarat, Moradabad in Uttar Pradesh and Jagadhari in Haryana. The delivery centre for brass traded at MCX platform is presently at Jamanagar.