The National Commodity & Derivatives Exchange (NCDEX) has signed a three-year deal with BigMint Technologies to establish transparent price benchmarks for steel scrap. This move aims to support the future launch of steel scrap derivatives, allowing industry players to hedge against raw material price volatility. The initiative is part of NCDEX’s strategic shift to diversify its commodity portfolio beyond agricultural products.
The National Commodity & Derivatives Exchange (NCDEX) has entered into a three-year strategic collaboration with BigMint Technologies to formalize price discovery in the domestic steel scrap market. The primary goal of this partnership is to generate independent, daily price assessments for steel scrap, which will serve as the foundation for launching exchange-traded derivatives in the future.
For the Indian steel industry, this move addresses a critical gap. Steelmakers, particularly those utilizing Electric Arc Furnaces, often struggle with volatile raw material costs. Currently, the market lacks a standardized, reliable benchmark, forcing participants to navigate price shifts through manual assessments and fragmented information. By creating a transparent reference point, NCDEX aims to provide manufacturers and traders with a formal hedging mechanism to manage these costs more effectively.
This initiative marks a key step in NCDEX’s broader effort to pivot from its traditional focus on agricultural commodities toward industrial and non-agricultural sectors. As an unlisted entity, NCDEX is working to transform into a multi-asset exchange. To support this ambitious expansion, the exchange raised ₹770 crore in 2025. This capital is intended to fund the development of new product lines, including equity and diverse industrial commodity derivatives.
While the push for new products is strategic, the success of steel scrap derivatives will depend on several factors. The exchange faces significant competition from established rivals like MCX and BSE, which also seek to capture volumes in the commodity derivatives space. A major challenge for NCDEX will be building sufficient market liquidity for a new industrial instrument. For any derivatives contract to be successful, it requires active participation from a wide range of industry stakeholders—including mills, recyclers, and importers—who must first gain confidence in the new price benchmark.
Looking ahead, the market will monitor the regulatory progress and the technical rollout of these contracts. The ability of the exchange to foster adoption among steel producers and ensure the new benchmarks align with international quality standards will be the deciding factor in whether this initiative contributes meaningfully to the exchange’s long-term growth.