 "Multi Commodity Exchange plans to launch spot exchange in base metals")
Multi Commodity Exchange of India on Tuesday said it is planning to launch spot exchange in base metals which will help develop and discipline the fragmented physical market and complement bourse's delivery-based futures market.
We don't have a robust spot market and that is one area we will cater in future by setting up a spot exchange which will help us to arrive at a fair price discovery, MCX MD and CEO P S Reddy said in a statement.
The country's largest commodity exchange is a monopoly exchange in delivery-based base metals futures and options.
After delivery of over 1,00,000 tonne of base metals in the last one-and-a-half years, the bourse is planning to introduce the delivery of domestically refined lead futures, currently based on the one traded onthe London Metal Exchange (LME).
Other base metals contracts too are benchmarked against LME.
Reddy said the LME benchmark is not relevant for India.
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We should have price discovery based on how and what Indian traders trade, he said adding that MCX is working with Indian lead producers and probably from next financial year it will be ready to allow locally recycled lead with purity of .998 compared with current .999 necessary for LME approved brands.
MCX has already created an infrastructure and logistics to enable the delivery of domestically refined gold,that will help redefine India gold standard and help the country in curbing excessive gold imports and influence global price discovery.
Meanwhile, MCX is also set to launch its second cash-settled index futures in base metals, named Metaldex, with effect from October 19 as its first such product, Bulldex, evoked a good response since launch in August.
Bulldex, an index futures contract on gold and silver in a proportion of 71:29, has been clocking Rs 250-300 crore worth turnover every day since launch, Reddy added.