NCDEX Launches India’s First PRA-Based Steel Scrap Futures

The National Commodity & Derivatives Exchange (NCDEX) launched India’s first Price Reporting Agency (PRA)-based steel scrap futures contract on 11 November 2026. The contract uses HMS 80:20, an internationally recognised grade comprising 80% Heavy Melting Scrap Grade 1 and 20% Heavy Melting Scrap Grade 2.

Contract features and price reference

BigMint Technologies, a commodity market intelligence and price reporting agency, will provide the contract’s price reference under an MoU with NCDEX. The cash-settled contract has a trading unit of 10 tonnes, a maximum order size of 500 tonnes and a tick size of ₹10 per tonne. Its basis centre is ex-mandi Gobindgarh, Punjab.

Market context

NCDEX said the contract is intended to provide a market-linked benchmark and an organised way to hedge price risk in a market where prices vary by region and scrap grade. NCDEX Managing Director and Chief Executive Officer Vikas Goel said the launch forms part of the exchange’s efforts to develop commodity markets. Domestic scrap generation rose 22% year-on-year to 32 million tonnes, while ferrous scrap imports fell 20%.

Important Facts for Exams

• Contract standardisation: Futures contracts standardise a purchase or sale at a predetermined price and future date, between parties who need not know each other in advance.
• Cash settlement: Cash-settled futures settle through cash payments based on an underlying reference rate, with parties exchanging the contract’s gain or loss at expiry.
• Scrap thickness grades: Steel scrap grading separates heavy-melting scrap, typically over 6 mm thick, from pressing steel, which is domestic scrap up to about 6 mm thick.