MCX launches world's 1st brass futures contract

The country s largest commodity exchange will commence futures trading in brass on March 26 and will offer three contracts ending in April, May and June for trading, with a lot size of one tonne.

Brass futures will not only provide its stakeholders with a more organised and robust price discovery platform, but will also help them to use a national level benchmark price as a ready reference to enable them to mitigate their price risk, the exchange said in a release.

Significantly, MCX Brass futures is the first non-ferrous contract with compulsory delivery option. The price is quoted ex-warehouse Jamnagar (delivery centre) inclusive of taxes and duties, excluding GST.

"The contract will lead to best price discovery for brass, which is of key relevance to its stakeholders including importers, exporters, manufacturers, refiners, and processors among others in the country, who are looking to hedge their price exposure," said Mrugank Paranjape, managing director and chief executive officer, MCX.

Brass is an alloy, which primarily contains around 55-60 per cent copper and the rest is zinc, with small amounts of lead and iron. It is used in industries like electrical appliance, marine engines, pump parts, switch gears, sanitary ware, automobiles and defence.

Jamnagar Factory Owners Association president Tulsibhai Gajera said almost the entire scrap for making brass gets imported into India, but the importers are not sure on the price until the brass shipments lands in the country.