NSE inks pact with Steel Users Federation to develop steel derivatives market

Kolkata: National Stock Exchange of India Limited (NSE) has signed a Memorandum of Understanding (MoU) with the Steel Users Federation of India (SUFI) to collaborate on the development and growth of the steel and any other relevant commodity derivatives ecosystem in India.

The partnership aims to create a transparent and efficient price-risk management framework for the Indian steel industry participants, enabling them to hedge price volatility through exchange-traded derivatives. The initiative is expected to benefit a wide range of stakeholders including steel manufacturers, processors, MSMEs, OEMs, infrastructure companies, end-users, etc.

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Under the MoU, NSE and SUFI will work closely on product design, market outreach, industry consultations, capacity building and awareness initiatives to facilitate the development of the steel and any other relevant Commodity derivatives products in India.

India is among the world’s largest producers and consumers of steel, with the commodity widely used across sectors such as automobiles, engineering, infrastructure, capital goods and consumer durables.

The proposed contract is expected to provide an effective hedging mechanism and support improved price discovery for the domestic steel value chain participants.

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Sriram Krishnan, Chief Business Development Officer (CBDO), NSE, said: “The Indian steel industry has matured significantly and there is a growing need for transparent and efficient risk management tools. Our collaboration with SUFI is an important step towards building credible and liquid derivatives contracts that addresses the hedging requirements of the Indian steel market participants. NSE remains committed to developing innovative commodity derivative products aligned with the evolving needs of the industry.”