The agreement, which is effective immediately, will initially apply to MCX contracts for aluminium, tin and nickel in small lot sizes of 1 metric tonne. Pricing will be in Rupees.
Following the launch of plastics contracts in May of this year, and the LME’s ongoing analysis of the possibility of steel futures, this agreement demonstrates the Exchange’s commitment to explore new opportunities and areas where it can add value.
Commenting on the announcement, Simon Heale, LME Chief Executive said:
“This is a unique agreement for the LME and it will reinforce the LME price as the only true global benchmark for the contracts that we trade. Additionally, it forges an important link with an ambitious and dynamic organisation which is currently the fastest growing exchange in India.
”The agreement is real, it sets out tangible activities rather than a mere willingness to agree to talk about working together and as such, it has the potential to bring significant benefits to both parties. We wish MCX great success with the contracts that they are launching and look forward to this relationship continuing to develop for mutual benefit.”
Jignesh Shah, MCX Managing Director and Chief Executive Officer, said:
"It is a privilege for MCX to be recognised and associated with the global leader, LME. We are happy to provide the Indian metal industry with a mechanism to hedge their price risk, based on a globally efficient market, within the country, at affordable cost and at no additional risk.
The agreement will enable a better understanding of the market dynamics of the base metals industry in India. It will integrate the Indian market and participants, with the global market more effectively and foster world-class best practices in commodity futures market regulation and operations.”
