For Zero Brokerage Trading Visit tradeplusonline.com
banner

MCX Contract specification of Aluminum and Zinc changed to compulsory delivery.


Posted on 17-Jan-2019 Comments  0

Dear Customer,

Greetings from Tradeplus!!!

In our constant endeavor to keep you updated of the latest regulatory changes, we here by notify the provisions of circulars No.: MCX/TRD/003/2019 ( Click here to read the circular) / Circular No. MCX/MCXCCL/002/2019 (Click for circular) and Circular No. MCX/MCXCCL/566/2018 (click here to read the circular) with regards to contract specification change of Aluminum and Zinc changed to compulsory delivery

 

MCX exchange has received permission from market regulator SEBI to modify the contract specifications in aluminum and zinc contracts from ‘both options’ (cash and delivery) to‘compulsory delivery’. SEBI has further permitted the exchange to implement the said modifications for aluminum from March 19 and April 19 futures contracts and for  Zinc from April 19 contract.

 

The due date final settlement price will be based on domestic polled spot prices against the current practice of following international prices. The price calculation will include LME price in rupee term, premium, customs duty and other charges, which will push up base aluminum and zinc prices by approx. Rs.13 to Rs.16 a kg. on account of these charges and taxes applicable for delivery (see sample illustration below).Trading in both the contracts on expiry day has been limited to 5 pm against 6.30 pm while the tender period will be the last five days of the contract and an incremental margin of 5 per cent will be levied for the last five days.

 

We would like to inform you that this price differences between Feb 19 and March 19 contract for Aluminum / March 19 and April 19 for Zinc shall NOT be considered as the Arbitrage opportunity to trade and request you to take appropriate measures before initiating the trades.

 

Please find below the sample illustrative calculation for possible price difference between both option contracts and compulsory delivery contract  prices of Aluminum & Zinc in the MCX segment.

 

Delivery contract pricing difference breakup - Illustrative

Sequence

Particulars

Aluminum

Zinc

Remarks

A

On screen price  as on Jan 17,2019

133

180

Dependent on LME price and INR/USD
conversion

 

for both option contract

 

 

 

B

Customs clearing cost

1%

1%

 

C=A*B

Landing cost in (INR/Kg)

1.33

1.8

 

D=A+C

Assessable Value

134.33

181.8

 

E

Basic customs duty + Surcharge (%)

8.25%

5.50%

Declared by MOF as on date

F=D*E

Customs duty value

11.08

10.00

 

G=D+F

Landed cost (INR/Kg)

145.41

191.80

 

H

Clearing and handling -Ex Port (INR/Kg)

1.0

2.0

approx. and will vary for entity to entity

I

Overheads to deliver into Warehouse

0.50

1.0

approx and will vary for entity and location

J=G+H+I

Final landed cost (INR/Kg)

146.91

194.80

approx. on screen price for compulsory
delivery contract

 

 

 

 

 

 

GST

18%

18%

Relevant only once delivery is taken


You are requested to take note of the above and for any clarification Please write to us at support@tradeplusonline.com
 or reach us on our customer support desk 044-49427576, 044-28214171.

 

Assuring our best services always

 

Warm regards

 

Tradeplus Team

 

user

Comment

Copyrights @ 2018 © Navia Markets pvt Ltd. All Right Reserved
Developed and content provided by  C-MOTS Infotech