Nickel is one of the commodities that has been traded through MCX. MCX stands for the Multi Commodity Exchange. MCX is the exchange where you can trade commodities such as gold, lead, nickel and agricultural products like cotton, coffee, turmeric, etc. just like the BSE exchange where stocks of companies are traded. The trading mechanism done through MCX is pretty transparent, and it is disciplined with the regulatory framework
Why should I invest in Nickel?
Nickel is a naturally occurring, radiant, silvery-white metal. It occurs widely in the earth's crust and also its the fifth most common element on earth. However, most of the nickel is challenging to get hold of in the core of the planet. Nickel's key characteristics are it is resistant against corrosion and oxidation, it has a high melting point, ease of deposit by electroplating and formation of alloys readily, ductility and catalytic properties.
Nickel plays an essential role in our daily lives. It's used for making multiple objects around us like food preparation equipment, medical equipment, mobile phones, transport, power generation and buildings —the list is nearly infinite.
In everyday use, there are about 3000 nickel-containing alloys. About 65% of nickel is mainly used in the manufacture of stainless steel. Not only stainless steel, but another 20% is also used in other steel and non-ferrous alloys.
Often nickel is used for highly specialized industrial, military applications and aerospace. Also, the metal nickel is used in plating and other uses, such as coins, batteries for portable equipment, electronics, hybrid cars. WIthout impairing performance or increasing cost production, you can never replace nickel on manufacturing these things.
As already mentioned, nickel offers better corrosion resistance, better strength at high and low temperatures and better toughness; it also renders a range of unique magnetic and electronic properties, and that's why it gets precedence over other metals.
In the nickel market, risk management techniques are critical for participants such as producers, exporters, marketers, processors, and SMEs. Given an uncertain future, modern technologies and strategies, including market-based risk management financial instruments, such as 'Nickel Futures', offered on the MCX platform can improve efficiencies and consolidate competitiveness through price risk management.
Reasons for trading Nickel:
Nickel is used in almost everything! From stainless steel to magnets, batteries, electronics, and even guitar strings, nickel is ever-present in our everyday lives.
Without nickel, many industries wouldn't be able to exist. There is always a need for nickel in the industry sector. It's more like lithium and cobalt.
Stainless steel is a longer-lasting metal, and to manufacture that nickel plays an important role. It lasts for 25–30 years without breaking down, so combining nickel with stainless steel makes the steel last longer.
Stainless steel is utilized in almost every manufacturing industry. Therefore, without nickel, stainless steel would be much less effective.
Stainless steel demand is expanding, particularly in China.
What are the factors influencing the market:
Prices are commanding in international markets.
Exchange rates of the US dollar and INR.
Financial events such as recession, inflation, global economic crisis, national industrial growth, etc., impact the metal prices.
Events related to commodity-specific activities such as the construction of new production facilities or processes, unexpected mine or plant closures, due to natural disaster, accident, strike, supply disruption, and so onward.
Before trading in nickel, it's always good to learn these Contract Specifications of Nickel:
The contract starts at 1st of a contract launch month and the last trading day falls on the last day of the calendar of the contract expiry month. If the contract launch date falls on a holiday, then the following day the contract starts. Whereas, if the contract expiry day falls on a holiday, the previous day the contracts expire.
Trading Period: Mondays through Saturdays
Trading Session is from Monday to Friday: 10.00 a.m. to 11.30 p.m. And on Saturday its10.00 a.m. to 2.00 p.m.
Trading Unit: 250 kg
Quotation/ Base Value: 1 kg
Maximum Order Size: 24 MT
Tick Size (Minimum Price Movement):10 paise per kg
Daily Price Limits: Normally, the base price limit will be 4%. Whenever there is a breach in the base daily price limit, the relaxation will be allowed to 6%.In case, if the 6% base price limit the daily price limit will be relaxed up to 9% after a cooling-off period of 15 minutes.
Initial Margin: Minimum 6% or based on SPAN whichever is higher
Maximum Allowable Open Position:
For individual clients: 600 MT
Collectively for all clients: 3,000 MT or 15% of the market-wide open position, whichever is higher.
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