Of the various segments in metals & mining industry, Base Metals holds a significant space in shaping the foundation of world economy due to its many industrial applications.
Within the base metals, Copper is one of the earliest metals to be extracted in ancient India. Copper is the third largest metal consumed in the world after Steel and Aluminium.
NSE is launching Futures and Options in Copper on 22nd February 2021.
Copper is a soft, malleable and ductile metal and is considered to be the best non-precious metal conductor of electricity.
Top Copper Mining nations are Chile, Peru, China, Congo and US where Chile being highest (5.8 Mio Tonnes out of 20.5 Mio Tonnes)
Global refined Copper Production stands at 24 Mio Tonnes where China leads as the largest producer.
Globally 24.4 Mio Tonnes of refined Copper is being Consumed out of which China being the highest at 12.7 Mio Tonnes.
The Indian Copper Industry has 3 primary producers of Copper - Hindalco (Birla Copper), Vedanta (Sterlite Copper) and Hindustan Copper.
- Hindalco operates one of the largest single location custom copper smelters in the world with a refining capacity of 500,000 MT
- Vedanta used to produce about 400,000 MT before their Tuticorin plant shutdown in 2018. Their production has now come down by more than 70% since then
- Hindustan Copper is India's only vertically integrated copper producing company has a refining capacity of 99,500 MT
Factors Influencing Copper Prices:
- Data - Daily LME Inventory, CFTC Copper speculative net positions, U.S. Nonfarm Payrolls, Unemployment Rate / Change
- Government trade policies and agreements (Change in taxes, duties, freight)
- Unpredicted closure of major mine / primary production smelter
- Economic Events - Inflation, Recession, Economic / Industrial Growth
- Weather, Natural disaster, Pandemic Scenarios
- Union Strike at vital production/mining units
- Change in Usage Practices - Production specific processes, Change in raw material of manufacturing traditional products
NSE Copper specifications
|Instrument Type||Futures Contract (FUTBAS)||Options Contract with Goods as Underlying (OPTBAS)|
|Product||Copper Futures||European styled Options contract exercised only on the expiration day|
|Contract Listing||Monthly contracts|
|Trading Unit||2.5 MT|
|Quotation / Base Value||₹ per 1 Kg|
|Tick Size||₹ 0.05|
|Strike Price Intervals||₹ 2.50|
|Settlement Logic||Compulsory Delivery|
|Settlement of Contract||On expiry, all open positions shall be settled by compulsory delivery|
|Final Settlement Price||Final Settlement Price (FSP) is determined by polling|