MCX Zinc Mini refers to a commodity futures contract available on the Multi Commodity Exchange (MCX) of India, where zinc is the underlying asset. Zinc Mini has smaller contract size of 1 metric tonne, compared to the standard Zinc futures contract, which is 5 metric tonnes.
This smaller contract size or “lot size” of the Zinc Mini makes it more affordable and accessible for retail investors, allowing them to profit from price fluctuations in the zinc market with a lower capital requirement.
- Zinc Mini
- What is the difference between Zinc and Zinc Mini?
- Contract Specifications – Mcx Zinc Mini
- How to invest in Zinc Mini?
- Factors That Influence The Zinc Price
- Mcx Zinc Mini – Quick Summary
- Zinc Mini – FAQs
Zinc Mini is the term given to the miniature version of the standard zinc futures contract traded on MCX. With a lot size of 1 metric tonne (MT), it’s a one-fifth of the standard contract size (5 MT), making it a popular choice for investors with smaller capital.
This reduced size makes Zinc Mini a go-to choice for investors with smaller capital, providing an opportunity for participants to hedge against market volatility. It also enables retail investors to participate in commodity trading without the need for a significant upfront investment.
To illustrate, let’s say the current price of zinc is ₹200 per kg. The cost of one Zinc Mini contract would be ₹2,00,000 (200*1000), which is considerably less than the cost of a standard Zinc contract, making it more accessible for small-scale traders and investors.
What is the difference between Zinc and Zinc Mini?
The primary difference between Zinc and Zinc Mini lies in the contract size. The standard Zinc futures contract traded on the MCX has a contract size of 5 metric tonnes. On the other hand, the Zinc Mini contract, being a smaller version, has a contract size of 1 metric tonne.
Let’s understand it better through a table considering 5 key parameters:
|Parameters||MCX Zinc||MCX Zinc Mini|
|Lot Size||5 MT||1 MT|
|Daily Price Limits||Base price +/− 4%||Base price +/− 3%|
|Initial Margin||Higher due to larger lot size||Lower due to smaller lot size|
|Eligibility||Suitable for larger investors or companies seeking to hedge their exposure||More accessible for retail traders and small businesses due to the lower contract size|
|Volatility||High – Impacted by global demand and supply|
Less – Due to the smaller contract size and lower market participation
Contract Specifications – Mcx Zinc Mini
The MCX Zinc Mini commodity contract begins on the first business day of the launch month and expires on the last business day of the month. The trading session is from Monday to Friday, 9:00 AM – 11:30/11:55 PM, with a lot size of 1 Metric Tonne (MT). The price quote is per kilogram, with a tick size of ₹0.50 and a maximum order size of 10 lots.
|Contract Start Day||1st day of the contract launch month. If it’s a holiday, then the following business day|
|Expiry Date||Last business day of the month|
|Trading Session||Monday to Friday: 9:00 AM – 11:30 PM/11:55 PM (Daylight saving)|
|Lot Size||1 Metric Tonne (MT)|
|Purity||As per MCX standard|
|Price Quote||Per kilogram|
|Maximum Order Size||As per MCX regulation|
|Base Value||1 MT of Zinc|
|Delivery Unit||1 MT (Minimum)|
|Delivery Centre||As notified by MCX|
|Additional Price Quote||Prices are quoted in ₹ per 1 MT|
|Maximum Order Size (additional)||10 lots|
|Delivery Unit (additional)||1 MT with a tolerance limit of +/- 2%|
|Delivery Period Margin||Starts from the beginning of the month of contract expiry|
For instance, if an investor purchases a Zinc Mini contract at ₹200 per kg (₹200,000 per MT), they would need to comply with these specifications for successful trade and delivery.
How to invest in Zinc Mini?
Investing in Zinc Mini involves the following steps:
- Open a trading account with a broker registered with MCX.
- Deposit the required margin in your account.
- Use the trading platform provided by your broker to buy/sell Zinc Mini contracts.
- Monitor your position regularly and use stop-loss orders to manage risk.
- Square off your position before the contract expires if you do not wish to take delivery.
Factors That Influence The Zinc Price
The foremost factor influencing Zinc prices is the fundamental economic principle of supply and demand. If the demand for Zinc exceeds the supply, the prices tend to increase and vice versa.
Other influencing factors include:
- Global Economic Conditions: Zinc, a widely used industrial metal, sees fluctuating demand based on global economic health. In robust economies, the demand for zinc (infrastructure, manufacturing, etc.) often increases.
- Mining Output and Operational Issues: Any disruptions in mining operations or a decrease in output can lead to a supply shortfall, pushing prices upwards.
- Inventory Levels: Stock levels of Zinc at major metal exchanges can significantly impact its price. High inventory levels typically indicate a surplus, which could depress prices.
- Currency Fluctuations: As commodities are typically priced in US dollars, fluctuations in the dollar’s value can affect Zinc prices.
- Government Policies and Trade Agreements: Policies or trade agreements that affect the mining or usage of Zinc can impact its price.
- For instance, if a major zinc mine halts operations due to a strike, this could decrease the global supply of zinc, leading to a potential price increase, assuming the demand remains constant.
We hope that you are clear about the topic. But there is more to learn and explore when it comes to the stock market, commodity and hence we bring you the important topics and areas that you should know:
|Crude Oil Mini|
|Natural Gas Mini|
Mcx Zinc Mini – Quick Summary
- MCX Zinc Mini is a smaller contract of the standard Zinc futures traded on the Multi Commodity Exchange (MCX) of India.
- Each Zinc Mini contract represents 1 metric ton (MT) of Zinc, making it a more affordable investment option for retail investors.
- The primary difference between Zinc and Zinc Mini lies in the contract size. The size of a standard Zinc futures contract on the MCX is 5 metric tonnes. The Zinc Mini contract, on the other hand, is a smaller version with a contract size of 1 metric tonne.
- To invest in Zinc Mini, one needs to open a trading account, deposit the required margin, and trade using the platform provided by the broker.
- The price of Zinc is influenced by several factors, including supply and demand, global economic conditions, mining output, inventory levels, currency fluctuations, and government policies.
- Invest in zinc mini with Alice Blue. With their 15 Rs brokerage plan, you can save more than ₹ 1100 in brokerage every month. They also don’t levy clearing charges.
Zinc Mini – FAQs
1. What is MCX Zinc Mini?
MCX Zinc Mini is a future contract on the Multi Commodity Exchange of India, representing 1 metric ton of Zinc, offering a cost-effective way for retail investors to trade in Zinc.
2. What Is the Zinc Mini Lot Size?
The lot size of Zinc Mini on the MCX is 1 metric ton. This smaller lot size compared to the standard Zinc contract makes it more affordable and accessible for retail investors.
3. What is the future of the zinc market?
The future of the zinc market is quite promising, given its widespread use in various industries, including construction, infrastructure, automobile, consumer goods, and more. Emerging markets, increasing urbanization, and infrastructural development could further fuel demand.
4. Why is zinc so expensive?
Factors like global supply-demand dynamics, mining outputs, inventory levels, and currency fluctuations influence zinc’s price. Disruptions in any of these can increase the price, making Zinc seem expensive.
5. Is zinc a good investment?
Zinc can be a good investment, offering diversification and a hedge against inflation. However, like all commodities, Zinc prices can be volatile and are subject to various global economic and industry-specific factors.
6. How can I trade zinc?
Trading Zinc involves investing in futures contracts, like the MCX Zinc Mini, through a registered broker. After depositing the required margin and understanding contract specifications, one can start trading via the broker’s platform.