India's Multi Commodity Exchange (MCX) has launched the country's first copper options contracts.
- The copper option contracts were launched with lot size of 1 tonne in three contracts expiring in June, August and November 2018.
- The option contract will provide physical market participants an additional instrument to hedge their risk.
- In order to encourage active participation in the market the exchange is not levying any transaction fees on all the commodity options contracts till 30th September 2018.
- It gives copper industry greater flexibility with alternative opportunities to take on price risk.
- It will also complement current futures contracts on the MCX.
- It would help in bringing greater vibrancy to metals market and give stakeholders opportunity to better manage the price risks.
- Copper ranks as the third-most-consumed industrial metal in the world, after iron and aluminium.
- The world’s refined copper usage has surged in the last few years, owing to the growing demand in sectors like electrical and electronic products, building construction, industrial machinery and equipment, transportation equipment, and consumer and general products.
- Copper ore production in India stood at 3,846 thousand tonnes in 2016-17 and its consumption demand for refined copper was 820 thousand tonnes in the FY16.
