MCX will launch the Zinc Mini futures contract on Friday. Initially, four contracts expiring from March to June will be available for trading.
The contract will be traded between 9 am to 11.30 pm, but only up to 5 pm on the time expiry day.
The trading unit will be of one tonne with a price quote of 1 kg. Minimum order size will be of 100 tonne.
The mini contract will help attract MSME and retail investors interest at a time when zinc demand is on the rise.
The delivery will be of primary special high-grade Zinc with minimum purity of 99.995 per cent. Besides LME approved brands, MCX approved primary zinc producers brands will also be accepted for delivery.
For quality assessment, reliance shall be placed by the WSP on the Certificate of Analysis (CoA) issued by the producers.
On contract expiry, all the open positions shall be marked for compulsory delivery, said the exchange.
Price limit and delivery stipulations
Delivery intentions of sellers shall be randomly allocated to ensure that all buyers have an equal opportunity irrespective of the size or value of the position. However, preference may be given to buyers who have given an intention of taking delivery. Pay-in will be on T+1 excluding Saturday, Sunday and public holiday. The buyer to whom the delivery is allocated will not be allowed turning down of it. If the seller fails to deliver, the penal provisions as specified for seller default will be applicable.
The exchange has implemented a narrow slab of 4 per cent. Whenever this is breached, the relaxation will be allowed up to 6 per cent without any cooling off period in the trade.
In case the daily price limit of 6 per cent is also breached, then after 15 minutes, the daily price limit will be relaxed up to 9 per cent. In case price movement in international markets is more than the maximum daily price limit (of 9 per cent), the same may be further relaxed in steps of 3 per cent, said the exchange.
The open position limit has been set at 7,000 tonne or 5 per cent of market wide open position whichever is higher for all Zinc contracts combined together for individual clients.
For a member, including all clients, the limit will be 70,000 tonnes or 20 per cent of the market wide open position, whichever is higher for all zinc contracts combined together, it added.
The exchange has accredited warehouses at Thane district for delivery and additional delivery centres at Chennai, Kolkata and National Capital Region.