Aluminium is a versatile commodity used in the automotive, construction, and packaging industries. Aluminium mini contracts are smaller futures contracts designed for trading aluminium with greater flexibility. Each aluminium mini contract represents 1 metric tonne (MT) of aluminium, offering a more manageable size for trading.
Introduction
Aluminium, a versatile and essential metal, plays a crucial role in our daily lives and various industries. From keeping food fresh in packaging to ensuring the quality of beverage cans, aluminium's practical applications are widespread. Its lightweight, durable, and strong properties make it a vital material in the transportation industry, where it is used extensively in cars, trains, boats, and even aircraft—many of which are composed of over 50% aluminium.
Aluminium is a silvery-white, soft, and ductile metal. The Greeks and Romans used aluminium salts for dyeing and medicinal purposes. Today, aluminium is renowned for its recyclability, retaining its natural qualities through numerous cycles. According to the International Resource Panel, the global per capita stock of aluminium in use averages 80 kg. China, India, and Russia are the world's top producers of aluminium.
Factors that Impact the Aluminium Mini Price
- Global Market Influence: Prices in international markets have a significant impact on aluminium rates, with fluctuations often tied to the global economy, currency exchange rates, and geopolitical events.
- Substitution Risks: The transportation sector, particularly automotive and aerospace, heavily relies on aluminium. Advances in alternative, lighter materials could reduce aluminium demand, leading to lower prices.
- Electricity Costs: Aluminium production is energy-intensive, requiring approximately 15,000 kWh of electricity per tonne. The cost of electricity, which can account for up to 45% of production costs in regions like China, India, and Russia, directly influences aluminium prices.
- Industry Demands: Aluminium is used extensively in various sectors, including construction, machinery, refrigeration, automotive, and aerospace. Technological advancements in any of these areas could impact its price.
- Global Economic Conditions: The global economy, including the strength of the U.S. dollar, economic slowdowns, and the growth of economies like China and India, plays a crucial role in determining aluminium prices.
Things to Consider Before Trading in Aluminium Mini
Before entering aluminium trading, it’s crucial to consider key factors for informed decision-making:
- Raw Material Costs: The cost of bauxite, the primary ore used to produce aluminium, impacts overall production costs and, consequently, aluminium prices.
- Regulatory and exchange rules: Ensure you are aware of the rules and regulations set by the exchange where aluminium mini contracts are traded, including margin requirements and settlement procedures.
- Economic indicators: Monitoring economic indicators such as industrial production, global economic growth, and infrastructure development is important, as these factors heavily influence aluminium demand.
- Currency fluctuations: Aluminium prices are denominated in US dollars. Therefore, fluctuations in currency exchange rates can affect prices in local markets.
Aluminium Mini Expiry Date Calendar 2024
Contract launch calendar for Aluminium Mini for the year 2024
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January 2024
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May 2024
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January 2025
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April 2025
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How to Trade in Aluminium Mini via Angel One?
- Open a Demat and Trading Account: First, open a Demat and trading account with Angel One.
- Activate the Commodity Segment: Once your Demat account is ready to trade, make sure you activate the commodity segment in order to trade aluminium mini contracts and other commodities.
- Monitor the Market: Track exchanges like MCX (Multi Commodity Exchange) and NCDEX (National Commodity and Derivatives Exchange) to stay updated on live aluminium mini prices, market trends, and relevant news.
- Place Your Trades: Use the Angel One trading platform and leverage indicators like bollinger bands, RSI, and MACD to build your commodity trading strategy.
- Manage Your Risk: To control your risk and guard against big losses on your trades, use measures like stop-loss orders.
