Aluminium, zinc deliveries off to a robust start on MCX

Mumbai: Aluminium and zinc futures, which became compulsory delivery contracts since this year, have witnessed encouraging delivery volumes on metals and energy bourse MCX, say market stakeholders. The participation of hedgers, which was lacking in the past, will deepen the market and reduce bid-ask spreads further, which will benefit traders.

Such has been the initial interest that the bourse recently accredited a second delivery centre in Thane district, off Mumbai, as a delivery centre for base metals. A Sebi official said delivery results in a better speculatorhedger mix and prevents “excessive” speculation. Deliveries were done by traders and other actual users based on polled prices. Most commodity contracts, including agri and non agri, have been made compulsorily deliverable after Sebi took over regulation of the commodity futures market in September 2015.

Kishore Narne, associate director, Motilal Oswal Financial Services, which has intermediated for part of the base metals’ delivery said compulsory delivery ensured that hedgers “have come onto the exchange platform” ensuring “better price discovery”.


An MCX official said lead and nickel would become deliverable from June. Currently, MCX facilitates delivery of precious metals like gold and silver, cotton and mentha, apart from base metals. Energy contracts are cash settled.