NCDEX Introduces India's First Steel Scrap Futures Contract

NCDEX has launched a futures contract for steel scrap, making it the first exchange-traded product of its kind in India. Announced on November 11, 2026, the contract will be based on HMS 80:20, a grade comprising 80% Heavy Melting Scrap Grade 1 and 20% Heavy Melting Scrap Grade 2. 

The grade is widely used in international scrap markets and serves as an import benchmark across Asia. BigMint Technologies Private Limited will provide the price reference for the contract under an agreement signed with NCDEX. 

PRA-Based Pricing 

One of the issues in India's steel scrap market is the variation in prices across different regions and grades. Market participants use multiple pricing references, leaving no common exchange-traded benchmark for the material.  

The new contract will use BigMint's price assessments under a Price Reporting Agency (PRA) framework. 

Trading Unit Fixed at 10 Metric Tonnes 

The contract will be traded in units of 10 metric tonnes (MT), with a maximum order size of 500 MT. The minimum price movement is ₹10 per MT. Settlement will be in cash, and Mandi Gobindgarh in Punjab will serve as the basis centre. Prices will be quoted exclusive of GST. 

Steelmakers and Traders Among Potential Users 

The contract covers several participants in the steel supply chain. Steel manufacturers can buy futures to secure scrap costs ahead of procurement. Billet and wire rod manufacturers and traders can sell futures to hedge against a fall in their selling prices. Sponge iron producers can also use the contract to manage price declines. 

BigMint data shows a 90% correlation between HMS 80:20 and billet prices, while the correlation with wire rod prices stands at 89%. 

Domestic Steel and Scrap Production 

India produced approximately 168.4 million tonnes of crude steel in FY26, up 10.7% from the previous year. Domestic scrap generation increased 22% to 32 million MT, while ferrous scrap imports fell 20%. 

The exchange has identified steel clusters in Punjab, Delhi NCR, Rajasthan, Gujarat, Maharashtra, West Bengal, Chhattisgarh, Odisha and Tamil Nadu as markets where the contract could be used. 

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Conclusion  

With the introduction of the contract, NCDEX has added steel scrap to its futures offerings. BigMint will provide the price reference, while Mandi Gobindgarh will serve as the basis centre. 

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