Is Brass treated as an engineering alloy?
Brass has been accepted as an engineering alloy in the last millennium.
The production of brass became more important after the Industrial revolution.
Cast brass was hammered to make wrought plate in a water-powered 'battery'. Rods cut from the plate were then pulled through dies by hand to make the vital stock needed for pins for the textile weaving industry.
What is Brass? How is it processed?
Brass is an alloy made of copper and zinc; the magnitude of zinc and copper can be mixed to create a range of brass metal with varying properties.
Brass is often used in situations in which it is important that sparks not be struck, such as in fittings and tools used near flammable or explosive materials.
Brass has higher malleability than bronze or zinc. The relatively low melting point of brass and its flow characteristics make it a relatively easy material to cast.
Today, almost 90% of all brass alloys are recycled. Because brass is not ferromagnetic, it can be separated from ferrous scrap by passing the scrap near a powerful magnet.
What is the commercial applicability of Brass?
Brass is an ideal alloy for the transport of water through pipes and fittings. It is also suitable for use in marine engines and pump parts.
The most common usage of the metal comes from its non-magnetic nature.
Clock and watch components, electrical terminals and munitions all require a metal that will not be affected by magnetism, which is where brass finds its usage.
How is the production and distribution of Brass in INDIA estimated?
The estimated annual production of Brass in India is close to 250,000 MT.
This includes production via primary metal and recycling. In India, Jamnagar, in Gujarat, Moradabad and Jagadhiri in UP are large production centres of brass.
Jamnagar consists of around 5000 large and small brass units, involved in brass industry.
There are foundries, manufacturing units, and units which make specialised brass products which are exported to various countries around the world.
It involves taking equal and opposite positions in two different markets with the objective of reducing or limiting risks associated with price change.
It is a two-step process, where a gain or loss in the physical position due to changes in price will be offset by changes in the value on the derivatives platform, thereby reducing or limiting risks associated with unpredictable changes in price.
What are the factors that impact the prices of Brass?
Brass prices are reliant either on the international standard of the primary metal copper and zinc or the supply and demand of brass scrap and brass.
Economic events, such as the national industrial growth, global financial crisis, recession and inflation, influence metal prices.
Trade policies set by the government (execution or suspension of taxes, penalties and quotas) affect supply as they regulate (restricting or encouraging) material flow.
Geopolitical events concerning governments or economic paradigms and armed conflict can cause major changes.
What are the contracts available for trading Brass?
To start with, three contracts ending in April, May and June 2018 will be available for trading. The lot size of the contract is one tonne. The brass futures will be the first non-ferrous contract with compulsory delivery option.
The price is quoted ex-warehouse Jamnagar (basis centre) inclusive of taxes and duties, excluding GST. The ingots and billets are of IS-319 grade.
As an exchange-traded product, Brass Futures aims to provide maximum price transparency and equal access to all market participants. It would improve the price discovery process and provide a price discovery platform as well as a hedging tool to the brass industry.
What do Industry experts say on the launch of Brass futures trade in India?
Sanjay Mehta, President, Metals Recycling Association of India (MRAI) said, “The brass industry in India always wanted a price benchmark for the industry. The brass futures debut on MCX will provide the brass industry not only a robust price discovery platform but also an excellent tool to hedge their price risk. It is indeed a historical moment for MCX as well as for brass industries in India, as this contract is not just the first in India but it’s the world’s first brass futures.
How can the price movement of Brass predicted?
As discussed above, Copper and Zinc are two major metals involved in this process.
As past representations of the Brass charts are not available, it is essential to take Copper and Zinc into consideration.
An uptick in the market movement of Copper will increase the scope of upward movement of Brass prices as well. Similarly a downfall in Zinc prices can have a similar downward impact in Brass prices.
Hence the market movements of Copper and Zinc can be used to predict the market movement of Brass prices.
The point to be noted – Those who have a special liking and interest to trade in Brass which is an emerging market, can trade and benefit from the same.
How can the price movement of Brass be calculated?
The percentage in which it can be calculated is as follows:
The price value of copper - 60 % can be taken into account
The price value of Zinc - 40% can be taken into account
For EX: If the Copper price is 433 & If the Zince price is 213.5
Then: 60% of 433. i.e 260 & 40% of 213.5 is 85
Then the value of Brass can be calculated as 260 + 85 = 345