ALUMINIUM

The Multi Commodity Exchange of India Limited (MCX) is a India-based state-of-the-art electronic
commodity futures exchange that facilitates online trading, and clearing and settlement of commodity
futures transactions, providing a platform for risk management. MCX offers trading in more than 40
commodity futures contracts across segments including bullion, ferrous and non-ferrous metals, energy,
and agricultural and agri-based commodities.
INTRODUCTION
Aluminium (chemical symbol - Al) is the third most abundant element present in the earth's crust. It exists
in a very stable combination with other materials particularly silicates and oxides.
It is resistant to common atomospheric gases and a wide range of liquids. Hence, aluminium is known for
its durability and high resale value.
Aluminium is a unique metal; which is light weight, strong, durable, flexible, and impermeable. It is rust
resistant and is 100% recyclable.

=
=
=

APPLICATIONS
Aluminiums unique characteristics make it a highly attractive metal. It is primarily used in transportation,
packaging (cans), defence and consumer electronic industries. Its high strength-to-weight ratio makes it
suitable for the construction of aircrafts, cars and train carriages. Transportation equipment and building
construction account for around 50% of aluminium consumption.
14%

End-usage

27%

MCX is a
leading
commodity
exchange in
India, with a
market share of
87%*
(Q3 FY 2012-13)
*In terms of the value of commodity
futures contracts traded
(Source: Data maintained by FMC)

Transport

7%

Construction
Electrical
Machinery & Equipments

9%

Packaging
Consumer durables
Others
10%
23%
10%
Source: CRU

DEMAND AND SUPPLY

In 2012, global primary aluminium production was 40.974 million metric tonnes (MMT), up from 39.930
MMT in 2011.
Global primary aluminium consumption rose to 48.075 MMT in 2012, compared with 44.594 MMT in 2011.

=
=

World Aluminium Production

World Aluminium Consumption

(in thousand MT)

(in thousand MT)

45000

60000

40000
Oceania

35000

East & Central Europe

30000

China

25000

Asia (ex China)

20000

For private circulation only

50000
40000

Rest of World
Asia (Excl China)

30000

China

Africa

15000

West Europe

10000

South America

5000

North America

North America

20000

Europe ( Excl Russia)

10000
0

2009

2010

Source: world aluminum .org

2011

2012

2009

2010

2011

2012

Source: Eurpean Aluminum Association

INDIAN SCENARIO
=
=

Currently, India is the fifth largest producer of aluminium in the world with an average annual production
of 171,3924 MT.
Indian aluminium industry consists of four primary producers: Hindalco, NALCO (a Government of India
enterprise), BALCO, and Vedanta Aluminium are the four major aluminium producing companies in India.

GLOBAL SCENARIO
=
=

World primary aluminum production increased in 2012 compared to the production in 2011, as a
result of starting new smelters and restarting smelters that had been shut down in 2008 and early 2009.
Major aluminium exporting countries are Germany, Russia and Canada, while major aluminium importing
countries are USA, Germany and China.
Leading Aluminium Exporters - 2011

Leading Aluminium Importers - 2011

10.3%
9.8%

46.1%

7.1%
6.6%
5.9%
2.9% 3.3% 3.8%

4.2%

China
Germany
Canada
Russian Federation
USA
Norway
Australia
Italy
France
Other Countries

11.9%

Germany
USA
9.9%

Japan
Italy

49%

6.2%
4.4%
4.2%

3.2% 3.6%

France
Mexico
Rep. of Korea
China
Netherlands

3.8%
3.8%

Other Countries

Source: UN Comtarde - Year Book 2012

Globally, MCX is
No.1 in gold
and silver,
No.2 in
natural gas,
and No.3 in
crude oil*
*In terms of the commodity futures
contracts traded during CY 2011
(Source: Websites of exchanges
and FIA data)

FACTORS INFLUENCING THE MARKET

=
=
=

=
=
=

Aluminium prices in India are fixed on the basis of the rates that rule on the international spot
market, and Indian Rupee and US Dollar exchange rates.
Economic events such as national industrial growth, global financial crisis, recession, and inflation
affect metal prices.
Commodity-specific events such as the construction of new production facilities or processes, new
uses or the discontinuance of historical uses, unexpected mine or plant closures (natural disaster,
supply disruption, accident, strike, and so forth), or industry restructuring, all affect metal prices.
Trade policies set by the Government (implementation or suspension of taxes, penalties, and quotas)
affect supply as they regulate (restricting or encouraging) material flow.
Geopolitical events involving governments or economic paradigms and armed conflict can cause
major changes.
As societies develop, their demand for metal increases based on their current economic position, which
could also be referred as National Economic Growth Factor.

IMPORTANT GLOBAL EXCHANGES

Exchange

Product

Lot Size

IST

LME

HG Aluminium
Aluminium Mini

25 MT
5 MT

Shanghai Futures
Exchange (SHFE)

Aluminium

5 MT

06:30 to 9:00
11:30 to 13:30

MCX

Aluminium
Aluminium Mini

5 MT
1 MT

10:00 to 23:30# (Monday-Friday)

10:00 to 14:00 (Saturday)

6:30 to 00:30 *
17:10 to 22:40 **

* LME select ** LME Ring timing (Start time:- Ring session, End time - Kerb Trading), #: Day light timing 10:00 to 23:55 (Winter)

www.mcxindia.com

Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13

Stocks in MT

www.mcxindia.com

Source: Bloomberg

LME ALUMINIUM
Volume (MTs)
Open Interest (MTs)

SHFE ALUMINIUM

LME PRICE
Feb-13

Dec-12

Oct-12

Aug-12

Jun-12

Apr-12

Feb-12

Dec-11

Oct-11

Aug-11

Jun-11

Apr-11

150

140

120

90

70

60

6,000,000

5,000,000

1,000,000

0
` / kg

60

110
80000

100
60000

40000

3,000,000

2000

1500

2,000,000

1000

500

OI & Vol in MTs

MCX

Feb-11

Dec-10

Oct-10

Aug-10

Jun-10

Apr-10

Feb-10

Dec-09

Oct-09

Aug-09

Jun-09

Apr-09

Feb-09

Dec-08

Oct-08

Aug-08

Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13

$ / MT
3500
3250
3000
2750
2500
2250
2000
1750
1500
1250
1000
750
500
250
0

Price in $ / MT

(including CTCL)
Jun-08

Apr-08

MCX reaches
out to over
1,770 cities and
towns in India
through
3,46,000+
trading
terminals
Price in ` / kg

MCX Aluminum Near Month & LME Cash Correlation - 99.59%

160

140

120

100

80

40

20

LME

Source: Bloomberg

MCX Aluminum Volume & Open Interest

140000

130
120000

100000

80

20000

Price

Source: MCX R&D

LME Aluminum 3 Month Price Vs LME Stock

3500

(as of Q3 FY 2012-13)

3000

4,000,000

2500

IMPORTANT WEB SITES

www.world-aluminium.org | www.alunet.net | www.aluminum.org | www.metalbulletin.com |
www.basemetals.com | ww.futuresource.com | www.metalsmarket.net | www.metalsplace.com |
www.metalprices.com | www.gfms-metalsconsulting.com | www.brookhunt.com | www.world-bureau.com

CONTRACT SPECIFICATION OF ALUMINIUM AND ALUMINIUM MINI

SYMBOL

ALUMINIUM

ALUMINI

Description

ALUMINIUMMMMYY

ALUMINIMMYY

Trading period

Monday to Saturday

Trading session

Monday to Friday: 10:00 am to 11:30 pm#

Contract months

Monthly contracts

Saturday:

MCX is the first

commodity
exchange in
India to launch
mini futures
contracts in
various
commodities

10:00 am to 2:00 pm

Expiry date

Last day of the Contract

Trading unit

5 MT

Quotation/base value

` / kg

Tick size

5 paise / kg

1 MT

Maximum order size

150 MT

Daily price limit

4%

Initial margin

Minimum 5% or based on SPAN, whichever is higher

Special margin

In case of additional volatility, an additional margin (on both buy and

sale side) and /or special margin (on either buy or sell side) at such
percentage, as deemed fit; will be imposed in respect of all
outstanding positions.

Maximum allowable

For individual clients: 15,000 MT

open position

For a member: 75,000 MT or not more than 15% of the market-wide

open position in a contract at any point of time

Delivery logic

Both options

Delivery center

Exchange designated warehouse at Bhiwandi

Delivery unit

10 MT with tolerance limit of 0.5 MT

Due date rate (DDR)

calculation

Due date rate is calculated on the last day of the contract expiry, by
taking international spot price of Aluminium and it would be
multiplied by Rupee-US$ rate as notified by the Reserve Bank of India.

#: Day light timing 10:00 am to 11:55 pm (Winter)

Note: Please refer to the exchange circulars for the latest contract specifications and delivery and settlement
procedures.

www.mcxindia.com

090413

Customer Support: +91-22-6649 4040 | To get the latest futures prices on mobile: visit http://m.mcxindia.com or sms MCX <Commodity name> to 58888

Multi Commodity Exchange of India Limited

Exchange Square, Suren Road, Chakala, Andheri (East), Mumbai 400 093 | Tel. no.: +91-22-6731 8888 | Email: [email protected] | Website: www.mcxindia.com