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Base Metals:Efficient Way Of Portfolio Diversification


Commodities are broadly classified as precious metals,Base metals and Energy.Precious metals as name indicates are high cost metals like Gold & silver and most of the investors in India have it in their portfolio through physical mode.

Today we will take a view of base metals that we can own in our demat account.Base metals are cheap and no space is required to own them .Just open account and invest on single click online.We can trade/investin base metals as we do in shares in future as well in cash market.

About base metals:

Anyone have studied chemistry in his school or college life,may have some idea about base metals and its industrial uses.We have some of the well known base metals traded across  different exchanges in India.

1. Copper:

It is called as a king of all base metals due to vast industrial uses.It is a good conductor of electricity and heat absorber and is vastly used along with its alloys.Copper can be traded in future market at Multi-commodity exchange (MCX) as well in cash market of National Spot exchange Ltd.Lot size of copper at mcx is of 1000 Kg and at NSEL copper can be purchased in multiples of 1 Kg.Economic conditions impact copper prices most.

2.Lead:

Lead is mainly used in batteries and automobile industries.At MCX there is a lot of 5000 Kg.of lead and 1000 Kg of leadmini.At NSEL lead can be purchased in multiples of 1 Kg.

3.Zinc:

Zinc have uses in pharama industry,as an anti-corrosive agent and can be alloyed with different metals like copper and silver.

At MCX lot size is similar to lead.Also at NSEL zinc can be purchased from 1 kg and its multiples.

4.Nickel:

This is the most volatile among base metals cateogary.Nickel has imp applications related to steel and trend of steel prices mainly drives Nickel prices. At MCX nickel is a lot of 250 Kg and at NSEL it will be available for investment within few months.

Summary of current base metal prices and margin required:

Base Metal Current Price at MCXPer kg Lot Margin required for current price
Copper 402 1000 Kg Rs.24000/-
Lead 102 5000 Kg Rs.32000/-
Leadmini 102 1000Kg Rs.6000/-
Zinc 98 5000Kg Rs.28000/-
Zincmini 98 1000 Kg Rs.5000/-
Nickel 980 250 kg Rs.20,000/-

Margin is not fixed and can be changed depending upon market volatility.

 

Any individual can take benefits of volatility across base metals and can earn good amount of money.

Also future market provides opportunity for hedging against the physical stocks and control the price fluctuations.

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Category: Commodities

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2 Responses

  1. vijay says:

    sir,
    but now a days why all the metals are behaving on trend of dow jones. is this is because of global market weakness ?

    • admin says:

      All markets are coupled with each other.Both base metals and dow are influenced by bad economic conditions…But base metals at lower levels are very good to invest.

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Information provided on this blog is for general purpose only & not investment advice.Please take advice of SEBI Registered Investment Advisors before taking any investment decision.
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