NCDEX posts robust delivery of MS ingots

MUMBAI: The National Commodity and Derivatives Exchange Ltd's (NCDEX) platform saw a robust delivery of 1,980 MTs at the Ghaziabad base centre.

The robust delivery witnessed in the mild steel ingot contract, which expired on June 20, was on the back of active participation by exchange pre-approved steel mills, an exchange press release said here on Monday.

The MS ingot contract has seen deliveries been affected after a gap of almost a year as the exchange has streamlined the assaying process whereby exchange pre-approved steel mills are entitled to deliver without testing.

In order to ensure that the quality of commodity delivered is in accordance with the contract specifications, NCDEX regularly conducts stringent quality tests on the mills, the release said.

NCDEX is the only online commodity futures exchange in the world on which future contract in steel is fairly liquid.

The exchange claimed that the delivery of an excisable commodity like MS ingot on the exchange is another proof of NCDEX's commitment to the delivery process and infrastructure.

NCDEX has seen deliveries to the extent of 7,000 MT of MS ingots till date at its warehouse at Kolkata, Ghaziabad and Raipur. Steel is an excisable commodity which is subject to central excise and state level VAT.

The manufacturers or dealers who are registered under both these taxes only can deal in the delivery of MS ingots at the exchange. The steel contracts are considered to be an useful price hedging tool for the steel industry.

As per specifications of the MS ingot contract, the unit of trading as well as the delivery unit is 10 MTs.
The primary delivery centre for the contract is Ghaziabad and additional delivery centres for this contract are Mandi Gobinagarh, Raipur, Kolkata and Mumbai.

NCDEX has emerged as the world's third largest agricultural exchange as per an article of the United Nations Conference on Trade and Development (UNCTAD).

In terms of one-sided volumes, NCDEX had an average daily volume of trade of about Rs 3,800 crore in FY 07. In size, it ranks first in India and accounts for about 50 per cent of the volumes traded on the exchange here.