How to calculate for Aluminium and Zinc, parity and disparity between MCX price and International price?

#1

As per SEBI guidelines, Aluminium contracts from the month of March 2019 and Zinc contracts from the April 2019 will be physically settled similar to Gold and Silver. Just saw this SEBI/MCX circular.

I can also see that MCX is now showing up a separate spot market price for these physically settled contracts.
https://www.mcxindia.com/market-data/spot-market-price

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Now that these are physically settled, does someone have a calculation on how to calculate the parity/disparity between international price and local price of Zinc and Aluminium?

Can @nithin @MohammedFaisal @siva help?

ZINC and ZINCmini
Arbitrage opportunity in Aluminium?
#4

Had answered similar question for Gold/Silver earlier

Aluminium
Spot in $ (per MT) $1,850.00
Add CIF* in $ (per MT) $50.00
RBI Reference rate* as of Jan 3,2019(USDINR) ₹70.36
Convert Spot +Premium(INR per MT) ₹133,689.13
Convert Spot + Premium(INR per KG) ₹133.69
Add Custom Clearing Cost(1%) ₹1.34
Landing Cost(INR per KG) ₹135.03
Add Basic Customs Duty + Surcharge(8.25%)* ₹11.14
Landed Cost ₹146.17
Add Port Clearing & Handling charges(Rs 2/KG) 2.00
Add Delivery Overheads* to Warehouse(Thane) (Rs 1/KG) 1.00
Final Landed Cost 149.17

Similarly for Zinc,

Zinc
Spot in $ (per MT) $2,475.00
Add CIF* in $ (per MT) $200.00
RBI Reference rate* as of Jan 3,2019(USDINR) ₹70.36
Convert Spot +Premium(INR per MT) ₹188,220.22
Convert Spot + Premium(INR per KG) ₹188.22
Add Custom Clearing Cost(1%) ₹1.88
Landing Cost(INR per KG) ₹190.10
Add Basic Customs Duty + Surcharge(5.5%)* ₹10.46
Landed Cost ₹200.56
Add Port Clearing & Handling charges(Rs 2/KG) 2.00
Add Delivery Overheads* to Warehouse(Thane) (Rs 1/KG) 1.00
Final Landed Cost 203.56

*CIF - Cost of Insurance & Freight)
*RBI Reference Rates
*Surcharge or SWS stands Social Welfare Surcharge charged by the Govt.
*Delivery overheads will vary if Warehouse location is different

Here is a link to the above table.

1 Like
#6

Now that Lead and Nickel contracts are also physically settled, can you provide the calculations for the same

#7

It’s really appreciable, that you keep on solving the problems and this one is really a big problem as even 1 rs. change cost us rs. 5000.

I have been using this sheet for last 7-10 days for calculation basis, but never get the right values which matches with MCX, initially the difference was somewhere 30 paise, now it has gone upto rs. 3, which is really big for the trader like me.

#8

This is the theoretical calculation, the actual price difference is based on demand supply on the exchange. It can be less or more.