The national steel policy has proposed introduction of derivatives trading in steel with the purpose of minimising risk of steel price variation.
If the proposal materialised, India would be the first country to commence futures trading in steel as the commodity was not even traded on the London Metal Exchange (LME).
LME had several times toyed with the idea of introducing steel futures but, stopped short of implementing it.
According to the policy, one of the roles of the ministry of steel would be to help industry develop instruments of steel trading.
The idea was to help minimise the risk of steel price variation for the buyers and help smoothening the process of steel trade. At present, the metals being traded in India were gold and silver.
Steel industry sources confirmed that the policy had the clause referring to futures and options in steel.
However, they pointed out that the steel companies had time till mid-December to send in their clarifications on the policy.
The target date for the release of the policy was March 15.
Among the roles defined in the policy, the ministry would strive to provide consumer services by connecting buyers to suppliers through information network and by integrating steel with programmes of computerised trading of commodities.
However, sources said, one of the main problems in steel trading was that there were too many grades. Also, large warehouses to store the material would be required.
