Metals hog limelight

Copper, which has not gained attention for a long time, has been logging in good volumes on the Multi Commodity Exchange (MCE). After registering a turnover of Rs 170 crore on August 4, the November contract has zoomed to Rs 640 crore by August 25.

‘‘Prices of copper contracts follow the London Metal Exchange and moves in tandem with the international market. Prices have remained volatile in August. Traders have recently taken fancy to this metal,’’ said Sushil Sinha of Geojit Securities.

The turnover in contracts for flat steel, the main ingredient for infrastructure projects, has been increasing steadily. The September contract for flat steel which was trading at Rs 2 crore has gone up to Rs 4 crore. Similarly, turnover of September contract for tin on MCX has jumped from Rs 20 crore on August 4 to Rs 30 crore on August 24.

Though the turnover has been registering a steady rise, the prices have remained stable revealing that there are not many speculative trades. ‘‘The government has announced many big infrastructure projects including food for work and 100 days job guarantee schemes. These measures will boost metal consumption. Companies are now taking advantage of future contracts so that their deliveries are confirmed,’’ says Joseph Massey, deputy MD, MCE.

The industrial production is growing at the rate of 10 per cent plus and investments in new projects are rising rapidly. Hence, demand for metals can go only upwards.

On an average, volumes of these metals in the futures market have grown around 10 times. Other than big traders, companies like Crompton Greaves, Birla Copper, Sterlite Industries and Hindustan Copper have shown interests in copper contracts.

‘‘Manufacturing companies, which also export their products are also looking at future contracts to hedge their price risk. In fact, futures market has opened up a new avenue for manufacturers and traders alike,’’ says Massey. Other metals like gold and silver are also registering good volumes on both MCX and NCDEX due to the ensuing festive season. ‘‘The prices of bullion have remained flat which has encouraged more buyers to take position for the coming festival season,’’ says Sinha. With the economy expected to grow by 6-7 per cent, metals are likely to be in action in the coming days.