{"id":75500,"date":"2025-10-29T15:27:32","date_gmt":"2025-10-29T09:57:32","guid":{"rendered":"https:\/\/www.5paisa.com\/finschool\/?post_type=markets&#038;p=75500"},"modified":"2025-10-29T15:28:28","modified_gmt":"2025-10-29T09:58:28","slug":"copper-and-aluminium","status":"publish","type":"markets","link":"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/copper-and-aluminium\/","title":{"rendered":"Copper and Aluminium"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"75500\" class=\"elementor elementor-75500\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-23ba90b elementor-section-full_width tab_container elementor-section-height-default elementor-section-height-default\" data-id=\"23ba90b\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b6a6f9f\" data-id=\"b6a6f9f\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-e0f864e elementor-section-full_width elementor-section-height-default elementor-section-height-default\" data-id=\"e0f864e\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-wide\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-7efb245 chapters_list\" data-id=\"7efb245\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-33d4575 elementor-widget elementor-widget-shortcode\" data-id=\"33d4575\" data-element_type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\">\t<script>\n\t\tjQuery(document).ready(function(){\n\t\t\tjQuery(\"#post_chapters a[href*='\" + location.pathname + \"']\").addClass(\"current\");\n\t\t})\n\t<\/script>\n\t<div class=\"desktop_chapters\"><div id=\"post_chapters\"><div class=\"post_chapters-heading\">Chapters<\/div><ul><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/currency-commodity-and-government-securities\/\">Currency Market Basics <\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/reference-rates-and-impacts-of-events\/\">Reference Rates<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/impact-of-events-and-interest-rate-parity\/\">Events and Interest Rates Parity<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/usd-inr-pair\/\">USD\/INR Pair<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/understanding-futures-calendar\/\">Futures Calendar<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/eur-gbp-and-jpy\/\">EUR, GBP and JPY<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/an-overview-of-commodities-market\/\">Commodities Market <\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/gold-part-1\/\">Gold Part-1<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/gold-part-2\/\">Gold -Part 2<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/silver\/\">Silver<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/crude-oil\/\">Crude Oil<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/crude-oil-part-2\/\">Crude Oil -Part 2<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/crude-oil-part-3\/\">Crude Oil-Part 3<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/copper-and-aluminium\/\">Copper and Aluminium<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/lead-and-nickel\/\">Lead and Nickel<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/cardamom-and-mentha-oil\/\">Cardamom and Mentha Oil<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/natural-gas\/\">Natural Gas<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/commodity-options\/\">Commodity Options<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/cross-currency-pairs\/\">Cross Currency Pairs<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/government-securities\/\">Government Securities<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/electricity-derivatives\/\">Electricity Derivatives<\/a><\/li><\/ul><\/div><\/div><div class=\"chapters_toggle\" title=\"chapters\"><a title=\"chapters\" href=\"#\" id=\"open_chapters\"><span>View Chapters<\/span>&nbsp;&nbsp;&nbsp;<i class=\"fa fa-chevron-right\"><\/i><\/a><a title=\"chapters\" href=\"#\" id=\"close_chapters\" style=\"display:none;\"><span>Hide Chapters<\/span>&nbsp;&nbsp;&nbsp;<i class=\"fa fa-chevron-right\"><\/i><\/a><\/div>\t<script>\n\t\tjQuery(document).ready(function(){\n\t\t\tjQuery('.chapters_toggle #open_chapters').click(function(e){\n\t\t\t\te.preventDefault();\n\t\t\t\tjQuery('.desktop_chapters').css(\"left\",\"0px\");\n\t\t\t\tjQuery('#open_chapters').css(\"display\",\"none\");\n\t\t\t\tjQuery('#close_chapters').css(\"display\",\"block\");\n\t\t\t\t\/\/jQuery('.chapters_toggle').css(\"width\",\"200px\");\n\t\t\t})\n\t\t\tjQuery('.chapters_toggle #close_chapters').click(function(e){\n\t\t\t\te.preventDefault();\n\t\t\t\tjQuery('.desktop_chapters').css(\"left\",\"-480px\");\n\t\t\t\tjQuery('#open_chapters').css(\"display\",\"block\");\n\t\t\t\tjQuery('#close_chapters').css(\"display\",\"none\");\n\t\t\t\t\/\/jQuery('.chapters_toggle').css(\"width\",\"100%\");\n\t\t\t})\n\t\t});\n\t<\/script>\n\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-93f371b tabs_contents\" data-id=\"93f371b\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-90f6d06 market_content_tabs elementor-widget elementor-widget-eael-adv-tabs\" data-id=\"90f6d06\" data-element_type=\"widget\" data-widget_type=\"eael-adv-tabs.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t        <div data-scroll-on-click=\"no\" data-scroll-speed=\"300\" id=\"eael-advance-tabs-90f6d06\" class=\"eael-advance-tabs eael-tabs-horizontal eael-tab-auto-active \" data-tabid=\"90f6d06\">\n            <div class=\"eael-tabs-nav\">\n                <ul class=\"eael-tab-inline-icon\" role=\"tablist\">\n                                            <li id=\"study\" class=\"active-default eael-tab-item-trigger eael-tab-nav-item\" aria-selected=\"true\" data-tab=\"1\" role=\"tab\" tabindex=\"0\" aria-controls=\"study-tab\" aria-expanded=\"false\">\n                            \n                                                                <i class=\"far fa-edit\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Study<\/span>                            \n                                                    <\/li>\n                                            <li id=\"slides\" class=\" eael-tab-item-trigger eael-tab-nav-item\" aria-selected=\"false\" data-tab=\"2\" role=\"tab\" tabindex=\"-1\" aria-controls=\"slides-tab\" aria-expanded=\"false\">\n                            \n                                                                <i class=\"fas fa-book-open\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Slides<\/span>                            \n                                                    <\/li>\n                                            <li id=\"videos\" class=\" eael-tab-item-trigger eael-tab-nav-item\" aria-selected=\"false\" data-tab=\"3\" role=\"tab\" tabindex=\"-1\" aria-controls=\"videos-tab\" aria-expanded=\"false\">\n                            \n                                                                <i class=\"far fa-eye\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Videos<\/span>                            \n                                                    <\/li>\n                                    <\/ul>\n            <\/div>\n            \n            <div class=\"eael-tabs-content\">\n\t\t        \n                    <div id=\"study-tab\" class=\"clearfix eael-tab-content-item active-default\" data-title-link=\"study-tab\">\n\t\t\t\t        <p><div class='white' style='background:rgb(255, 255, 255); border:solid 0px rgb(255, 255, 255); border-radius:0px; padding:0px 0px 0px 1px;'>\n<div id='text_slider' class='owl-carousel sa_owl_theme owl-pagination-true' data-slider-id='text_slider' style='visibility: visible;visibility:visible;'>\n<div id='text_slider_slide01' class='sa_hover_container' data-hash='The-Sumitomo-Copper-Scandal' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>14.1 <\/strong><strong><b>The Sumitomo Copper Scandal<\/b><\/strong><\/h2>\r\n<p><em><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Exams-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Exams-rafiki.svg\" \/><\/a><\/em><\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I came across something called the Sumitomo Copper Scandal. What was that about?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Ah, that\u2019s one of the most famous cases of market manipulation. A trader named Hamanaka tried to control global copper prices by hoarding physical copper and building huge futures positions.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Sounds risky. Did it work?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0For a while, yes. But when global supply surged\u2014especially from China\u2014his strategy collapsed. Sumitomo lost billions.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So it\u2019s a lesson in overconfidence?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. It shows why risk management and transparency matter more than dominance in any market.<\/p>\r\n<p>In the world of commodities, few stories are as infamous\u2014or instructive\u2014as the Sumitomo Copper Scandal. This event, which unfolded in Japan during the mid-1990s, remains one of the most dramatic examples of rogue trading and market manipulation. It\u2019s a cautionary tale that continues to echo through trading floors and risk management discussions even today.<\/p>\r\n<h3><strong><b>The Setup: Sumitomo\u2019s Copper Empire<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>Sumitomo Corporation, a major Japanese conglomerate, was deeply involved in global commodity trading. Among its divisions, copper trading stood out\u2014both for its scale and its influence. At the centre of this operation was Yasuo Hamanaka, Sumitomo\u2019s chief copper trader, often referred to as \u201cMr. Copper\u201d in industry circles.<\/li>\r\n<li>Hamanaka\u2019s strategy was aggressive and far-reaching. He purchased physical copper from global markets and stored it in warehouses across Japan, Europe, and other key ports. At one point, his spot market holdings represented nearly 5% of the world\u2019s copper reserves\u2014an astonishing figure that gave him significant control over supply.<\/li>\r\n<li>Simultaneously, Hamanaka built massive long positions in copper futures on the London Metal Exchange (LME). Because the LME did not publish open interest data at the time, the true extent of his exposure remained hidden from other market participants.<\/li>\r\n<\/ul>\r\n<h3><strong><b>The Manipulation: How the Strategy Worked<\/b><\/strong><\/h3>\r\n<p>Whenever other traders attempted to short copper, Hamanaka would step in and buy aggressively. Backed by Sumitomo\u2019s deep pockets, he could absorb large volumes, pushing prices higher. This created a feedback loop:<\/p>\r\n<ul>\r\n<li>Rising copper prices squeezed short sellers.<\/li>\r\n<li>Those who defaulted on futures contracts had to source physical copper\u2014often from Sumitomo\u2014at a premium.<\/li>\r\n<li>Sumitomo profited both from futures and spot sales.<\/li>\r\n<\/ul>\r\n<p>This dual-market dominance allowed Hamanaka to profit handsomely and maintain control over copper pricing. For nearly a decade, the strategy worked. Sumitomo became a dominant force in the copper market, and Hamanaka was hailed as a trading genius.<\/p>\r\n<h3><strong><b>The Collapse: When Supply Overwhelmed Strategy<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>In the early 1990s, China ramped up its copper production, flooding the global market with supply. Prices began to decline. Hamanaka, heavily leveraged and deeply exposed, struggled to unwind his positions. Instead of cutting losses, he borrowed more to maintain his long exposure\u2014hoping for a rebound.<\/li>\r\n<li>But the market didn\u2019t cooperate. Copper prices continued to fall, and the sheer size of his positions made it impossible to exit without triggering further declines. The result was catastrophic: Sumitomo incurred losses estimated at $5 billion, and the scandal led to lawsuits, regulatory scrutiny, and a complete overhaul of internal risk controls.<\/li>\r\n<\/ul>\r\n<h3><strong><b>Lessons Learned<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>The Sumitomo Copper Scandal is more than a story of one trader\u2019s downfall\u2014it\u2019s a masterclass in the importance of risk management, transparency, and position sizing. It highlights how unchecked leverage and lack of oversight can bring down even the most powerful institutions.<\/li>\r\n<li>As we move into the fundamentals of copper trading, keep this case in mind. Markets reward discipline, not dominance. And no position\u2014no matter how profitable\u2014should ever be immune to scrutiny.<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide02' class='sa_hover_container' data-hash='Copper-Basics' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2><strong><b>14.2 \u2013<\/b><\/strong><strong><b>Copper Basics: Structure, Usage, and Trading on MCX<\/b><\/strong><\/h2>\r\n<h2 style=\"text-align: left\">\u00a0<\/h2>\r\n<h3 style=\"text-align: left\"><strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/New-entries-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/New-entries-rafiki.svg\" \/><\/a><\/strong><\/h3>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0That scandal was intense. But what makes copper so important today?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Copper is everywhere\u2014from EVs and telecom to construction and renewable energy. It\u2019s the third most consumed metal globally.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0And it\u2019s traded on MCX too?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Yes, in two formats\u2014standard and mini contracts. High liquidity, strong industrial demand, and macro sensitivity make it a favorite among traders.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So it reacts to global data like PMI and Fed decisions?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. And its technical charts are very responsive, which helps in short-term setups.<\/p>\r\n<p>Copper is one of the most actively traded base metals on the Multi Commodity Exchange (MCX). As a base metal, it belongs to the category of industrial-use metals that are not considered precious\u2014unlike gold or silver. Its high liquidity, with daily turnover exceeding \u20b92,000 crore across roughly 55,000 lots, places it in the same league as crude oil and gold in terms of market participation.<\/p>\r\n<h3><strong><b>Why Copper Matters<\/b><\/strong><\/h3>\r\n<p>Globally, copper ranks as the third most consumed metal, following steel and aluminium. Its price is tightly linked to macroeconomic cycles, infrastructure spending, and industrial output. Copper\u2019s versatility stems from its exceptional electrical conductivity, making it indispensable in power transmission and electronics.<\/p>\r\n<p>For instance, while most electric vehicles use permanent magnet motors, Tesla\u2019s Model 3 rear-wheel drive variant uses an induction motor with copper windings, reducing reliance on rare earth materials. This design choice highlights copper\u2019s strategic importance in the clean energy transition.<\/p>\r\n<p>Beyond EVs, copper is used extensively in:<\/p>\r\n<ul>\r\n<li>Urban infrastructure and construction (e.g., copper pipes and roofing)<\/li>\r\n<li>Electrical wiring and switchgear<\/li>\r\n<li>Industrial machinery and heat exchangers<\/li>\r\n<li>Railway electrification and signaling systems<\/li>\r\n<li>Telecom networks and data centres<\/li>\r\n<li>Renewable energy installations (solar and wind)<\/li>\r\n<\/ul>\r\n<p>One lesser-known but fascinating application is in antimicrobial surfaces. Hospitals in Europe and Japan have begun using copper alloy door handles and bed rails to reduce infection rates\u2014thanks to copper\u2019s natural ability to kill bacteria on contact.<\/p>\r\n<p><strong><b>Global Demand Snapshot<\/b><\/strong><\/p>\r\n<p>As of recent estimates, global refined copper demand exceeds 25 million metric tons annually, with China accounting for nearly 50% of consumption. India\u2019s demand is also rising, driven by electrification, housing, and telecom expansion. However, supply disruptions\u2014such as strikes in Chilean mines or export curbs in Africa\u2014can cause sharp price swings.<\/p>\r\n<h3><strong><b>Trading Copper on MCX<\/b><\/strong><\/h3>\r\n<p>Copper is traded in two contract formats on MCX: the standard Copper Futures and the Copper Mini Futures. Both are settled in cash and follow similar expiry rules, but differ in lot size and margin requirements.<\/p>\r\n<p><strong><b>Standard Copper Contract<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Price Quote<\/b><\/strong>: Per kilogram<\/li>\r\n<li><b><\/b><strong><b>Lot Size<\/b><\/strong>: 1 metric ton (1,000 kg)<\/li>\r\n<li><b><\/b><strong><b>Tick Size<\/b><\/strong>: \u20b90.05<\/li>\r\n<li><b><\/b><strong><b>P&amp;L per Tick<\/b><\/strong>: \u20b950 (\u20b90.05 \u00d7 1,000 kg)<\/li>\r\n<li><b><\/b><strong><b>Expiry<\/b><\/strong>: Last trading day of the month<\/li>\r\n<li><b><\/b><strong><b>Delivery Unit<\/b><\/strong>: 10 metric tons<\/li>\r\n<\/ul>\r\n<p>Let\u2019s say copper is trading at \u20b9748.20\/kg in October 2025. The contract value would be:<\/p>\r\n<p>Assuming a margin requirement of 7.5%, the NRML margin would be:<\/p>\r\n<p>For intraday trades (MIS), the margin would be roughly half\u2014around \u20b928,000.<\/p>\r\n<h3><strong><b>Copper Mini Contract<\/b><\/strong><\/h3>\r\n<ul>\r\n<li><b><\/b><strong><b>Price Quote<\/b><\/strong>: Per kilogram<\/li>\r\n<li><b><\/b><strong><b>Lot Size<\/b><\/strong>: 250 kg<\/li>\r\n<li><b><\/b><strong><b>Tick Size<\/b><\/strong>: \u20b90.05<\/li>\r\n<li><b><\/b><strong><b>P&amp;L per Tick<\/b><\/strong>: \u20b912.50 (\u20b90.05 \u00d7 250 kg)<\/li>\r\n<li><b><\/b><strong><b>Expiry<\/b><\/strong>: Last trading day of the month<\/li>\r\n<li><b><\/b><strong><b>Delivery Unit<\/b><\/strong>: 10 metric tons<\/li>\r\n<\/ul>\r\n<p>If the Copper Mini contract is trading at \u20b9749.00\/kg, the contract value would be:<\/p>\r\n<p>With a margin requirement of 8%, the NRML margin would be:<\/p>\r\n<p>This lower exposure makes the mini contract ideal for retail traders and those testing short-term strategies.<\/p>\r\n<h3><strong><b>Trading Strategy Tip<\/b><\/strong><\/h3>\r\n<p>Copper\u2019s high liquidity and sensitivity to global economic indicators make it an excellent candidate for technical analysis. Chart patterns, volume spikes, and moving averages work well on copper, especially around macro events like PMI releases, Fed rate decisions, or Chinese industrial data.<\/p>\r\n<h3 style=\"text-align: left\">\u00a0<\/h3><\/div>\n<div id='text_slider_slide03' class='sa_hover_container' data-hash='Aluminium-Basics' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>14.3 <\/strong><strong><b>Aluminium Basics: Abundance, Applications, and Trading Dynamics<\/b><\/strong><\/h2>\r\n<p style=\"text-align: left\"><em><span style=\"color: #000080\"><strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Search-engines-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Search-engines-bro.svg\" \/><\/a><\/strong><\/span><\/em><\/p>\r\n<p><strong>Varun:\u00a0<\/strong>Isha, what about aluminium? I always thought of it as packaging material.<\/p>\r\n<p><strong>Isha:<\/strong>\u00a0It\u2019s much more than that. Aluminium is used in aerospace, EVs, construction, and electronics. It\u2019s lightweight, corrosion-resistant, and highly recyclable.<\/p>\r\n<p><strong>Varun:<\/strong>\u00a0So it\u2019s industrially critical?<\/p>\r\n<p><strong>Isha:\u00a0<\/strong>Absolutely. India\u2019s demand is rising fast, and global production is over 60 million metric tons. But prices can swing due to energy costs and policy changes.<\/p>\r\n<p><strong>Varun:<\/strong>\u00a0Like the aluminium can shortage in India?<\/p>\r\n<p><strong>Isha:<\/strong>\u00a0Exactly. Even with abundant supply, local bottlenecks can create trading opportunities.<\/p>\r\n<p>Aluminium is one of the most widely used base metals in the world and a highly liquid commodity on MCX. While many associate it with kitchen foil or beverage cans, its industrial significance goes far beyond. From aerospace to electronics, aluminium plays a critical role in modern infrastructure and manufacturing.<\/p>\r\n<p><strong><b>Abundance and Properties<\/b><\/strong><\/p>\r\n<p>Aluminium is the third most abundant element in the Earth\u2019s crust, making up nearly 8% of its composition\u2014after oxygen and silicon. This abundance ensures that supply disruptions are rare, and prices are more influenced by energy costs and demand cycles than scarcity. One of aluminium\u2019s most valuable properties is its resistance to corrosion, which makes it ideal for outdoor structures, marine applications, and long-lasting components.<\/p>\r\n<p>However, aluminium production is extremely energy-intensive. It takes approximately 17.4 megawatt-hours of electricity to produce just one metric ton. This is why power costs form a significant portion of manufacturing expenses for companies like Hindalco and Vedanta. On the flip side, recycling aluminium requires only 5% of the energy, making it one of the most sustainable metals in circulation.<\/p>\r\n<p><strong><b>Industrial Applications<\/b><\/strong><\/p>\r\n<p>Aluminium\u2019s versatility is unmatched. It\u2019s used in:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Aerospace<\/b><\/strong>: A Boeing 747 uses over 70,000 kg of aluminium in its structure.<\/li>\r\n<li><b><\/b><strong><b>Automotive<\/b><\/strong>: Lightweight frames and engine components.<\/li>\r\n<li><b><\/b><strong><b>Construction<\/b><\/strong>: Windows, roofing, and structural panels.<\/li>\r\n<li><b><\/b><strong><b>Electronics<\/b><\/strong>: Smartphone casings and heat sinks.<\/li>\r\n<li><b><\/b><strong><b>Defense and Railways<\/b><\/strong>: Armored vehicles and high-speed train bodies.<\/li>\r\n<li><b><\/b><strong><b>Pharmaceuticals and Packaging<\/b><\/strong>: Foils, blister packs, and containers.<\/li>\r\n<\/ul>\r\n<p>India\u2019s demand for aluminium is growing rapidly, driven by infrastructure projects, EV adoption, and smart city initiatives. Domestic consumption is estimated at <strong><b>2 million <\/b><\/strong>metric tons annually, with a significant portion met through imports.<\/p>\r\n<h3><strong><b>Global Market Trends (2025)<\/b><\/strong><\/h3>\r\n<p>As per recent industry reports, global aluminium production in 2025 is projected to reach 60 million metric tons, up from 56 million in 2015. Demand is keeping pace, especially from China, Southeast Asia, and India. However, prices have remained volatile due to energy costs, geopolitical tensions, and trade policies.<\/p>\r\n<p>Here\u2019s a snapshot of global aluminium trends:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Production Growth<\/b><\/strong>: CAGR of ~6% over the last decade.<\/li>\r\n<li><b><\/b><strong><b>Demand Stability<\/b><\/strong>: Closely matches supply, minimizing inventory build-up.<\/li>\r\n<li><b><\/b><strong><b>Price Volatility<\/b><\/strong>: Average price in 2025 ranges from $2,580\/MT in Chinato $3,095\/MT in Germany, reflecting regional disparities.<\/li>\r\n<\/ul>\r\n<p><strong><b>Trading Aluminium on MCX<\/b><\/strong><\/p>\r\n<p>Aluminium is traded in two formats on MCX:<\/p>\r\n<h3><strong><b>Standard Aluminium Contract<\/b><\/strong><\/h3>\r\n<ul>\r\n<li><b><\/b><strong><b>Price Quote<\/b><\/strong>: Per kilogram<\/li>\r\n<li><b><\/b><strong><b>Lot Size<\/b><\/strong>: 1 metric ton (1,000 kg)<\/li>\r\n<li><b><\/b><strong><b>Tick Size<\/b><\/strong>: \u20b90.05<\/li>\r\n<li><b><\/b><strong><b>P&amp;L per Tick<\/b><\/strong>: \u20b950<\/li>\r\n<li><b><\/b><strong><b>Expiry<\/b><\/strong>: Last trading day of the month<\/li>\r\n<li><b><\/b><strong><b>Delivery Unit<\/b><\/strong>: 10 metric tons<\/li>\r\n<\/ul>\r\n<p>Example: If aluminium is trading at \u20b9215.40\/kg, the contract value is:<\/p>\r\n<p>With a margin requirement of <strong><b>8%<\/b><\/strong>, NRML margin would be \u20b917,232.<\/p>\r\n<h3><strong><b>Aluminium Mini Contract<\/b><\/strong><\/h3>\r\n<ul>\r\n<li><b><\/b><strong><b>Lot Size<\/b><\/strong>: 250 kg<\/li>\r\n<li><b><\/b><strong><b>P&amp;L per Tick<\/b><\/strong>: \u20b912.50<\/li>\r\n<li><b><\/b><strong><b>Margin<\/b><\/strong>: ~4.5% for MIS, ~9% for NRML<\/li>\r\n<\/ul>\r\n<p>This mini version is ideal for retail traders and short-term strategies.<\/p>\r\n<h3><strong><b>Aluminium Fundamentals: A 2025 Snapshot<\/b><\/strong><\/h3>\r\n<p>Aluminium remains one of the most actively traded base metals on MCX, prized for its liquidity, industrial relevance, and responsiveness to global macro trends. While long-term fundamentals are important, most traders hold aluminium positions for just a few days\u2014making it more practical to focus on price dynamics, technical setups, and short-term supply-demand shifts.<\/p>\r\n<h3><strong><b>Real-World Example: Aluminium Can Shortage in India (2025)<\/b><\/strong><\/h3>\r\n<p>In April 2025, India\u2019s beverage industry faced a major disruption due to a shortage of aluminium cans, triggered by new BIS certification rules. The Brewers Association of India estimated a shortfall of 12\u201313 crore units of 500 ml cans, which account for nearly 20% of beer sales nationwide. This supply crunch was not due to lack of raw aluminium, but due to bottlenecks in domestic manufacturing and import approvals.<\/p>\r\n<p>This incident highlights a key principle in aluminium trading: price is not just about global supply\u2014it\u2019s about regional bottlenecks, energy costs, and policy shifts. Even with abundant global production, local disruptions can create short-term price spikes and trading opportunities.<\/p>\r\n<h3><strong><b>Global Trends in 2025<\/b><\/strong><\/h3>\r\n<p>According to the Aluminium Global Industry Report:<\/p>\r\n<ul>\r\n<li><b><\/b>Global productionis projected to exceed 60 million metric tons, with steady growth from Southeast Asia and the Middle East.<\/li>\r\n<li>Consumptionis keeping pace, driven by EVs, solar infrastructure, and packaging.<\/li>\r\n<li>Priceshave rebounded from their 2020 lows, averaging $2,580\/MT in China and $3,095\/MT in Europe, reflecting regional energy costs and tariffs.<\/li>\r\n<li>India\u2019s demand is estimated at 2.2 million metric tons, with imports still playing a major role due to limited domestic smelting capacity.<\/li>\r\n<\/ul>\r\n<h3><strong><b>Trading Insight<\/b><\/strong><\/h3>\r\n<p>This kind of event-driven volatility\u2014like the aluminium can shortage\u2014can be spotted early through news flow and inventory data. For short-term traders, it\u2019s a reminder that technical analysis works best when paired with real-world context. A sudden spike in demand from packaging or auto sectors, or a policy change like tariffs or certification rules, can shift prices even if global supply remains stable.<\/p><\/div>\n<div id='text_slider_slide04' class='sa_hover_container' data-hash='Aluminium-Contracts-on-MCX' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>14.4 <\/strong><strong><b>Aluminium Contracts on MCX<\/b><\/strong><\/h2>\r\n<h2 style=\"text-align: left\">\u00a0<\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Warning-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Warning-rafiki.svg\" \/><\/a><\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I\u2019m thinking of trading aluminium. What are the contract options?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0MCX offers two: the standard contract with 5 metric tons and the mini with 1 metric ton. Both are quoted per kg and settled monthly.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So the mini is better for retail traders?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Yes. Lower margins, smaller tick value, and manageable exposure. Great for short-term strategies and learning the ropes.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0And the standard one suits bigger players?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. It offers deeper liquidity and higher tick value\u2014ideal for institutions and high-volume traders.<\/p>\r\n<p>Aluminium is a popular base metal on MCX, offering two distinct futures contracts: the Standard Aluminium Contract and the Aluminium Mini Contract. Both are quoted per kilogram and settled monthly, but they differ significantly in lot size, margin requirements, and tick value\u2014making them suitable for different types of traders.<\/p>\r\n<p>Let\u2019s break down each contract and understand how they work in practice.<\/p>\r\n<p><strong><b>Standard Aluminium Contract (5 MT)<\/b><\/strong><\/p>\r\n<p>This is the larger of the two contracts and is typically favoured by institutional traders or high-volume participants. The daily traded value averages around \u20b9375 crore, and on active days, it can exceed \u20b9500 crore. While not as large as gold or crude oil, aluminium still offers excellent liquidity and tight spreads.<\/p>\r\n<p><strong><b>Contract Specifications:<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Parameter<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Value<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Price Quote<\/p>\r\n<\/td>\r\n<td>\r\n<p>Per kilogram<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Lot Size<\/p>\r\n<\/td>\r\n<td>\r\n<p>5 metric tons (5,000 kg)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Tick Size<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b90.05<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>P&amp;L per Tick<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b90.05 \u00d7 5,000 = \u20b9250<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Expiry<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last trading day of the month<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Delivery Unit<\/p>\r\n<\/td>\r\n<td>\r\n<p>10 metric tons<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>Example (October 2025):<\/b><\/strong><\/p>\r\n<p>Let\u2019s say aluminium is trading at \u20b9262.60\/kg. The contract value would be:<\/p>\r\n<p>If the price moves by one tick (\u20b90.05), your profit or loss would be:<\/p>\r\n<p><strong><b>Margin Requirements:<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>NRML (Overnight)<\/b><\/strong>: ~5.6% \u2192 \u20b973,528<\/li>\r\n<li><b><\/b><strong><b>MIS (Intraday)<\/b><\/strong>: ~2.8% \u2192 \u20b936,764<\/li>\r\n<\/ul>\r\n<p><strong><b>Aluminium Mini Contract (1 MT)<\/b><\/strong><\/p>\r\n<p>This contract is designed for retail traders and those looking for smaller exposure. It\u2019s ideal for short-term strategies and technical setups, with manageable risk and lower capital requirements.<\/p>\r\n<p><strong><b>Contract Specifications:<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Parameter<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Value<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Price Quote<\/p>\r\n<\/td>\r\n<td>\r\n<p>Per kilogram<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Lot Size<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 metric ton (1,000 kg)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Tick Size<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b90.05<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>P&amp;L per Tick<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b90.05 \u00d7 1,000 = \u20b950<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Expiry<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last trading day of the month<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Delivery Unit<\/p>\r\n<\/td>\r\n<td>\r\n<p>10 metric tons<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>Example <\/b><\/strong><\/p>\r\n<p>If aluminium mini is trading at \u20b9262.60\/kg, the contract value is:<\/p>\r\n<p>A single tick movement gives:<\/p>\r\n<p><strong><b>Margin Requirements:<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>NRML<\/b><\/strong>: ~5.7% \u2192 \u20b914,968<\/li>\r\n<li><b><\/b><strong><b>MIS<\/b><\/strong>: ~2.8% \u2192 \u20b97,484<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide05' class='sa_hover_container' data-hash='Key-Takeaway' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2><strong><b>14.5 <\/b><\/strong><strong><b>Key Takeaway<\/b><\/strong><\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\" \/><\/a><\/p>\r\n<ul>\r\n<li>The Sumitomo Copper Scandal highlights the dangers of unchecked leverage and market manipulation.<\/li>\r\n<li>Copper is a vital industrial metal, used in EVs, infrastructure, electronics, and renewable energy.<\/li>\r\n<li>Copper demand is macro-sensitive, reacting to global data like PMI, Fed decisions, and Chinese output.<\/li>\r\n<li>MCX offers standard and mini copper contracts, with different lot sizes and margin requirements.<\/li>\r\n<li>Aluminium is the most abundant industrial metal, used across aerospace, construction, packaging, and electronics.<\/li>\r\n<li>Aluminium production is energy-intensive, making prices sensitive to power costs and policy shifts.<\/li>\r\n<li>India\u2019s aluminium demand is rising, driven by infrastructure, EVs, and smart city projects.<\/li>\r\n<li>MCX aluminium contracts come in standard (5 MT) and mini (1 MT) formats, catering to different trader profiles.<\/li>\r\n<li>Event-driven volatility\u2014like the 2025 aluminium can shortage\u2014can create short-term trading opportunities.<\/li>\r\n<li>Both copper and aluminium are excellent for technical analysis, offering liquidity, responsiveness, and macro relevance.<\/li>\r\n<\/ul>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide06' class='sa_hover_container' data-hash='Fun-Activity' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2><strong><b>14.6 <\/b><\/strong><strong><b>Fun Activity<\/b><\/strong><\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\" \/><\/a><\/p>\r\n<p><strong>Fill in the blanks:<\/strong><\/p>\r\n<ol>\r\n<li>Copper Mini contract has a tick size of \u20b90.05 and a lot size of 250 kg. \u2192 P&amp;L per tick = _______<\/li>\r\n<li>Aluminium Mini contract has a tick size of \u20b90.05 and a lot size of 1,000 kg. \u2192 P&amp;L per tick = _______<\/li>\r\n<\/ol>\r\n<p><strong>Answers:<\/strong><\/p>\r\n<ol>\r\n<li>\u20b90.05 \u00d7 250 = \u20b912.50<\/li>\r\n<li>\u20b90.05 \u00d7 1,000 = \u20b950<\/li>\r\n<\/ol><\/div>\n<\/div>\n<\/div>\n<script type='text\/javascript'>\n\tjQuery(document).ready(function() {\n\t\tjQuery('#text_slider').owlCarousel({\n\t\t\titems : 1,\n\t\t\tsmartSpeed : 400,\n\t\t\tautoplay : false,\n\t\t\tautoplayHoverPause : false,\n\t\t\tsmartSpeed : 400,\n\t\t\tfluidSpeed : 400,\n\t\t\tautoplaySpeed : 400,\n\t\t\tnavSpeed : 400,\n\t\t\tdotsSpeed : 400,\n\t\t\tdotsEach : 1,\n\t\t\tloop : false,\n\t\t\tnav : true,\n\t\t\tnavText : ['Previous','Next'],\n\t\t\tdots : true,\n\t\t\tresponsiveRefreshRate : 200,\n\t\t\tslideBy : 1,\n\t\t\tmergeFit : true,\n\t\t\tautoHeight : true,\n\t\t\tmouseDrag : false,\n\t\t\ttouchDrag : true\n\t\t});\n\t\tjQuery('#text_slider').css('visibility', 'visible');\n\t\tvar owl_goto = jQuery('#text_slider');\n\t\tjQuery('.text_slider_goto1').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 0);\n\t\t});\n\t\tjQuery('.text_slider_goto2').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 1);\n\t\t});\n\t\tjQuery('.text_slider_goto3').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 2);\n\t\t});\n\t\tjQuery('.text_slider_goto4').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 3);\n\t\t});\n\t\tjQuery('.text_slider_goto5').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 4);\n\t\t});\n\t\tjQuery('.text_slider_goto6').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 5);\n\t\t});\n\t\tvar resize_75471 = jQuery('.owl-carousel');\n\t\tresize_75471.on('initialized.owl.carousel', function(e) {\n\t\t\tif (typeof(Event) === 'function') {\n\t\t\t\twindow.dispatchEvent(new Event('resize'));\n\t\t\t} else {\n\t\t\t\tvar evt = window.document.createEvent('UIEvents');\n\t\t\t\tevt.initUIEvent('resize', true, false, window, 0);\n\t\t\t\twindow.dispatchEvent(evt);\n\t\t\t}\n\t\t});\n\t});\n<\/script>\n<\/p>                    <\/div>\n\t\t        \n                    <div id=\"slides-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"slides-tab\">\n\t\t\t\t        <p><div class='white' style='background:rgb(255, 255, 255); border:solid 0px rgb(255, 255, 255); border-radius:0px; padding:0px 0px 0px 1px;'>\n<div id='text_slider' class='owl-carousel sa_owl_theme owl-pagination-true' data-slider-id='text_slider' style='visibility: visible;visibility:visible;'>\n<div id='text_slider_slide01' class='sa_hover_container' data-hash='The-Sumitomo-Copper-Scandal' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>14.1 <\/strong><strong><b>The Sumitomo Copper Scandal<\/b><\/strong><\/h2>\r\n<p><em><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Exams-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Exams-rafiki.svg\" \/><\/a><\/em><\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I came across something called the Sumitomo Copper Scandal. What was that about?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Ah, that\u2019s one of the most famous cases of market manipulation. A trader named Hamanaka tried to control global copper prices by hoarding physical copper and building huge futures positions.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Sounds risky. Did it work?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0For a while, yes. But when global supply surged\u2014especially from China\u2014his strategy collapsed. Sumitomo lost billions.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So it\u2019s a lesson in overconfidence?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. It shows why risk management and transparency matter more than dominance in any market.<\/p>\r\n<p>In the world of commodities, few stories are as infamous\u2014or instructive\u2014as the Sumitomo Copper Scandal. This event, which unfolded in Japan during the mid-1990s, remains one of the most dramatic examples of rogue trading and market manipulation. It\u2019s a cautionary tale that continues to echo through trading floors and risk management discussions even today.<\/p>\r\n<h3><strong><b>The Setup: Sumitomo\u2019s Copper Empire<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>Sumitomo Corporation, a major Japanese conglomerate, was deeply involved in global commodity trading. Among its divisions, copper trading stood out\u2014both for its scale and its influence. At the centre of this operation was Yasuo Hamanaka, Sumitomo\u2019s chief copper trader, often referred to as \u201cMr. Copper\u201d in industry circles.<\/li>\r\n<li>Hamanaka\u2019s strategy was aggressive and far-reaching. He purchased physical copper from global markets and stored it in warehouses across Japan, Europe, and other key ports. At one point, his spot market holdings represented nearly 5% of the world\u2019s copper reserves\u2014an astonishing figure that gave him significant control over supply.<\/li>\r\n<li>Simultaneously, Hamanaka built massive long positions in copper futures on the London Metal Exchange (LME). Because the LME did not publish open interest data at the time, the true extent of his exposure remained hidden from other market participants.<\/li>\r\n<\/ul>\r\n<h3><strong><b>The Manipulation: How the Strategy Worked<\/b><\/strong><\/h3>\r\n<p>Whenever other traders attempted to short copper, Hamanaka would step in and buy aggressively. Backed by Sumitomo\u2019s deep pockets, he could absorb large volumes, pushing prices higher. This created a feedback loop:<\/p>\r\n<ul>\r\n<li>Rising copper prices squeezed short sellers.<\/li>\r\n<li>Those who defaulted on futures contracts had to source physical copper\u2014often from Sumitomo\u2014at a premium.<\/li>\r\n<li>Sumitomo profited both from futures and spot sales.<\/li>\r\n<\/ul>\r\n<p>This dual-market dominance allowed Hamanaka to profit handsomely and maintain control over copper pricing. For nearly a decade, the strategy worked. Sumitomo became a dominant force in the copper market, and Hamanaka was hailed as a trading genius.<\/p>\r\n<h3><strong><b>The Collapse: When Supply Overwhelmed Strategy<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>In the early 1990s, China ramped up its copper production, flooding the global market with supply. Prices began to decline. Hamanaka, heavily leveraged and deeply exposed, struggled to unwind his positions. Instead of cutting losses, he borrowed more to maintain his long exposure\u2014hoping for a rebound.<\/li>\r\n<li>But the market didn\u2019t cooperate. Copper prices continued to fall, and the sheer size of his positions made it impossible to exit without triggering further declines. The result was catastrophic: Sumitomo incurred losses estimated at $5 billion, and the scandal led to lawsuits, regulatory scrutiny, and a complete overhaul of internal risk controls.<\/li>\r\n<\/ul>\r\n<h3><strong><b>Lessons Learned<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>The Sumitomo Copper Scandal is more than a story of one trader\u2019s downfall\u2014it\u2019s a masterclass in the importance of risk management, transparency, and position sizing. It highlights how unchecked leverage and lack of oversight can bring down even the most powerful institutions.<\/li>\r\n<li>As we move into the fundamentals of copper trading, keep this case in mind. Markets reward discipline, not dominance. And no position\u2014no matter how profitable\u2014should ever be immune to scrutiny.<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide02' class='sa_hover_container' data-hash='Copper-Basics' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2><strong><b>14.2 \u2013<\/b><\/strong><strong><b>Copper Basics: Structure, Usage, and Trading on MCX<\/b><\/strong><\/h2>\r\n<h2 style=\"text-align: left\">\u00a0<\/h2>\r\n<h3 style=\"text-align: left\"><strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/New-entries-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/New-entries-rafiki.svg\" \/><\/a><\/strong><\/h3>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0That scandal was intense. But what makes copper so important today?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Copper is everywhere\u2014from EVs and telecom to construction and renewable energy. It\u2019s the third most consumed metal globally.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0And it\u2019s traded on MCX too?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Yes, in two formats\u2014standard and mini contracts. High liquidity, strong industrial demand, and macro sensitivity make it a favorite among traders.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So it reacts to global data like PMI and Fed decisions?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. And its technical charts are very responsive, which helps in short-term setups.<\/p>\r\n<p>Copper is one of the most actively traded base metals on the Multi Commodity Exchange (MCX). As a base metal, it belongs to the category of industrial-use metals that are not considered precious\u2014unlike gold or silver. Its high liquidity, with daily turnover exceeding \u20b92,000 crore across roughly 55,000 lots, places it in the same league as crude oil and gold in terms of market participation.<\/p>\r\n<h3><strong><b>Why Copper Matters<\/b><\/strong><\/h3>\r\n<p>Globally, copper ranks as the third most consumed metal, following steel and aluminium. Its price is tightly linked to macroeconomic cycles, infrastructure spending, and industrial output. Copper\u2019s versatility stems from its exceptional electrical conductivity, making it indispensable in power transmission and electronics.<\/p>\r\n<p>For instance, while most electric vehicles use permanent magnet motors, Tesla\u2019s Model 3 rear-wheel drive variant uses an induction motor with copper windings, reducing reliance on rare earth materials. This design choice highlights copper\u2019s strategic importance in the clean energy transition.<\/p>\r\n<p>Beyond EVs, copper is used extensively in:<\/p>\r\n<ul>\r\n<li>Urban infrastructure and construction (e.g., copper pipes and roofing)<\/li>\r\n<li>Electrical wiring and switchgear<\/li>\r\n<li>Industrial machinery and heat exchangers<\/li>\r\n<li>Railway electrification and signaling systems<\/li>\r\n<li>Telecom networks and data centres<\/li>\r\n<li>Renewable energy installations (solar and wind)<\/li>\r\n<\/ul>\r\n<p>One lesser-known but fascinating application is in antimicrobial surfaces. Hospitals in Europe and Japan have begun using copper alloy door handles and bed rails to reduce infection rates\u2014thanks to copper\u2019s natural ability to kill bacteria on contact.<\/p>\r\n<p><strong><b>Global Demand Snapshot<\/b><\/strong><\/p>\r\n<p>As of recent estimates, global refined copper demand exceeds 25 million metric tons annually, with China accounting for nearly 50% of consumption. India\u2019s demand is also rising, driven by electrification, housing, and telecom expansion. However, supply disruptions\u2014such as strikes in Chilean mines or export curbs in Africa\u2014can cause sharp price swings.<\/p>\r\n<h3><strong><b>Trading Copper on MCX<\/b><\/strong><\/h3>\r\n<p>Copper is traded in two contract formats on MCX: the standard Copper Futures and the Copper Mini Futures. Both are settled in cash and follow similar expiry rules, but differ in lot size and margin requirements.<\/p>\r\n<p><strong><b>Standard Copper Contract<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Price Quote<\/b><\/strong>: Per kilogram<\/li>\r\n<li><b><\/b><strong><b>Lot Size<\/b><\/strong>: 1 metric ton (1,000 kg)<\/li>\r\n<li><b><\/b><strong><b>Tick Size<\/b><\/strong>: \u20b90.05<\/li>\r\n<li><b><\/b><strong><b>P&amp;L per Tick<\/b><\/strong>: \u20b950 (\u20b90.05 \u00d7 1,000 kg)<\/li>\r\n<li><b><\/b><strong><b>Expiry<\/b><\/strong>: Last trading day of the month<\/li>\r\n<li><b><\/b><strong><b>Delivery Unit<\/b><\/strong>: 10 metric tons<\/li>\r\n<\/ul>\r\n<p>Let\u2019s say copper is trading at \u20b9748.20\/kg in October 2025. The contract value would be:<\/p>\r\n<p>Assuming a margin requirement of 7.5%, the NRML margin would be:<\/p>\r\n<p>For intraday trades (MIS), the margin would be roughly half\u2014around \u20b928,000.<\/p>\r\n<h3><strong><b>Copper Mini Contract<\/b><\/strong><\/h3>\r\n<ul>\r\n<li><b><\/b><strong><b>Price Quote<\/b><\/strong>: Per kilogram<\/li>\r\n<li><b><\/b><strong><b>Lot Size<\/b><\/strong>: 250 kg<\/li>\r\n<li><b><\/b><strong><b>Tick Size<\/b><\/strong>: \u20b90.05<\/li>\r\n<li><b><\/b><strong><b>P&amp;L per Tick<\/b><\/strong>: \u20b912.50 (\u20b90.05 \u00d7 250 kg)<\/li>\r\n<li><b><\/b><strong><b>Expiry<\/b><\/strong>: Last trading day of the month<\/li>\r\n<li><b><\/b><strong><b>Delivery Unit<\/b><\/strong>: 10 metric tons<\/li>\r\n<\/ul>\r\n<p>If the Copper Mini contract is trading at \u20b9749.00\/kg, the contract value would be:<\/p>\r\n<p>With a margin requirement of 8%, the NRML margin would be:<\/p>\r\n<p>This lower exposure makes the mini contract ideal for retail traders and those testing short-term strategies.<\/p>\r\n<h3><strong><b>Trading Strategy Tip<\/b><\/strong><\/h3>\r\n<p>Copper\u2019s high liquidity and sensitivity to global economic indicators make it an excellent candidate for technical analysis. Chart patterns, volume spikes, and moving averages work well on copper, especially around macro events like PMI releases, Fed rate decisions, or Chinese industrial data.<\/p>\r\n<h3 style=\"text-align: left\">\u00a0<\/h3><\/div>\n<div id='text_slider_slide03' class='sa_hover_container' data-hash='Aluminium-Basics' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>14.3 <\/strong><strong><b>Aluminium Basics: Abundance, Applications, and Trading Dynamics<\/b><\/strong><\/h2>\r\n<p style=\"text-align: left\"><em><span style=\"color: #000080\"><strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Search-engines-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Search-engines-bro.svg\" \/><\/a><\/strong><\/span><\/em><\/p>\r\n<p><strong>Varun:\u00a0<\/strong>Isha, what about aluminium? I always thought of it as packaging material.<\/p>\r\n<p><strong>Isha:<\/strong>\u00a0It\u2019s much more than that. Aluminium is used in aerospace, EVs, construction, and electronics. It\u2019s lightweight, corrosion-resistant, and highly recyclable.<\/p>\r\n<p><strong>Varun:<\/strong>\u00a0So it\u2019s industrially critical?<\/p>\r\n<p><strong>Isha:\u00a0<\/strong>Absolutely. India\u2019s demand is rising fast, and global production is over 60 million metric tons. But prices can swing due to energy costs and policy changes.<\/p>\r\n<p><strong>Varun:<\/strong>\u00a0Like the aluminium can shortage in India?<\/p>\r\n<p><strong>Isha:<\/strong>\u00a0Exactly. Even with abundant supply, local bottlenecks can create trading opportunities.<\/p>\r\n<p>Aluminium is one of the most widely used base metals in the world and a highly liquid commodity on MCX. While many associate it with kitchen foil or beverage cans, its industrial significance goes far beyond. From aerospace to electronics, aluminium plays a critical role in modern infrastructure and manufacturing.<\/p>\r\n<p><strong><b>Abundance and Properties<\/b><\/strong><\/p>\r\n<p>Aluminium is the third most abundant element in the Earth\u2019s crust, making up nearly 8% of its composition\u2014after oxygen and silicon. This abundance ensures that supply disruptions are rare, and prices are more influenced by energy costs and demand cycles than scarcity. One of aluminium\u2019s most valuable properties is its resistance to corrosion, which makes it ideal for outdoor structures, marine applications, and long-lasting components.<\/p>\r\n<p>However, aluminium production is extremely energy-intensive. It takes approximately 17.4 megawatt-hours of electricity to produce just one metric ton. This is why power costs form a significant portion of manufacturing expenses for companies like Hindalco and Vedanta. On the flip side, recycling aluminium requires only 5% of the energy, making it one of the most sustainable metals in circulation.<\/p>\r\n<p><strong><b>Industrial Applications<\/b><\/strong><\/p>\r\n<p>Aluminium\u2019s versatility is unmatched. It\u2019s used in:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Aerospace<\/b><\/strong>: A Boeing 747 uses over 70,000 kg of aluminium in its structure.<\/li>\r\n<li><b><\/b><strong><b>Automotive<\/b><\/strong>: Lightweight frames and engine components.<\/li>\r\n<li><b><\/b><strong><b>Construction<\/b><\/strong>: Windows, roofing, and structural panels.<\/li>\r\n<li><b><\/b><strong><b>Electronics<\/b><\/strong>: Smartphone casings and heat sinks.<\/li>\r\n<li><b><\/b><strong><b>Defense and Railways<\/b><\/strong>: Armored vehicles and high-speed train bodies.<\/li>\r\n<li><b><\/b><strong><b>Pharmaceuticals and Packaging<\/b><\/strong>: Foils, blister packs, and containers.<\/li>\r\n<\/ul>\r\n<p>India\u2019s demand for aluminium is growing rapidly, driven by infrastructure projects, EV adoption, and smart city initiatives. Domestic consumption is estimated at <strong><b>2 million <\/b><\/strong>metric tons annually, with a significant portion met through imports.<\/p>\r\n<h3><strong><b>Global Market Trends (2025)<\/b><\/strong><\/h3>\r\n<p>As per recent industry reports, global aluminium production in 2025 is projected to reach 60 million metric tons, up from 56 million in 2015. Demand is keeping pace, especially from China, Southeast Asia, and India. However, prices have remained volatile due to energy costs, geopolitical tensions, and trade policies.<\/p>\r\n<p>Here\u2019s a snapshot of global aluminium trends:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Production Growth<\/b><\/strong>: CAGR of ~6% over the last decade.<\/li>\r\n<li><b><\/b><strong><b>Demand Stability<\/b><\/strong>: Closely matches supply, minimizing inventory build-up.<\/li>\r\n<li><b><\/b><strong><b>Price Volatility<\/b><\/strong>: Average price in 2025 ranges from $2,580\/MT in Chinato $3,095\/MT in Germany, reflecting regional disparities.<\/li>\r\n<\/ul>\r\n<p><strong><b>Trading Aluminium on MCX<\/b><\/strong><\/p>\r\n<p>Aluminium is traded in two formats on MCX:<\/p>\r\n<h3><strong><b>Standard Aluminium Contract<\/b><\/strong><\/h3>\r\n<ul>\r\n<li><b><\/b><strong><b>Price Quote<\/b><\/strong>: Per kilogram<\/li>\r\n<li><b><\/b><strong><b>Lot Size<\/b><\/strong>: 1 metric ton (1,000 kg)<\/li>\r\n<li><b><\/b><strong><b>Tick Size<\/b><\/strong>: \u20b90.05<\/li>\r\n<li><b><\/b><strong><b>P&amp;L per Tick<\/b><\/strong>: \u20b950<\/li>\r\n<li><b><\/b><strong><b>Expiry<\/b><\/strong>: Last trading day of the month<\/li>\r\n<li><b><\/b><strong><b>Delivery Unit<\/b><\/strong>: 10 metric tons<\/li>\r\n<\/ul>\r\n<p>Example: If aluminium is trading at \u20b9215.40\/kg, the contract value is:<\/p>\r\n<p>With a margin requirement of <strong><b>8%<\/b><\/strong>, NRML margin would be \u20b917,232.<\/p>\r\n<h3><strong><b>Aluminium Mini Contract<\/b><\/strong><\/h3>\r\n<ul>\r\n<li><b><\/b><strong><b>Lot Size<\/b><\/strong>: 250 kg<\/li>\r\n<li><b><\/b><strong><b>P&amp;L per Tick<\/b><\/strong>: \u20b912.50<\/li>\r\n<li><b><\/b><strong><b>Margin<\/b><\/strong>: ~4.5% for MIS, ~9% for NRML<\/li>\r\n<\/ul>\r\n<p>This mini version is ideal for retail traders and short-term strategies.<\/p>\r\n<h3><strong><b>Aluminium Fundamentals: A 2025 Snapshot<\/b><\/strong><\/h3>\r\n<p>Aluminium remains one of the most actively traded base metals on MCX, prized for its liquidity, industrial relevance, and responsiveness to global macro trends. While long-term fundamentals are important, most traders hold aluminium positions for just a few days\u2014making it more practical to focus on price dynamics, technical setups, and short-term supply-demand shifts.<\/p>\r\n<h3><strong><b>Real-World Example: Aluminium Can Shortage in India (2025)<\/b><\/strong><\/h3>\r\n<p>In April 2025, India\u2019s beverage industry faced a major disruption due to a shortage of aluminium cans, triggered by new BIS certification rules. The Brewers Association of India estimated a shortfall of 12\u201313 crore units of 500 ml cans, which account for nearly 20% of beer sales nationwide. This supply crunch was not due to lack of raw aluminium, but due to bottlenecks in domestic manufacturing and import approvals.<\/p>\r\n<p>This incident highlights a key principle in aluminium trading: price is not just about global supply\u2014it\u2019s about regional bottlenecks, energy costs, and policy shifts. Even with abundant global production, local disruptions can create short-term price spikes and trading opportunities.<\/p>\r\n<h3><strong><b>Global Trends in 2025<\/b><\/strong><\/h3>\r\n<p>According to the Aluminium Global Industry Report:<\/p>\r\n<ul>\r\n<li><b><\/b>Global productionis projected to exceed 60 million metric tons, with steady growth from Southeast Asia and the Middle East.<\/li>\r\n<li>Consumptionis keeping pace, driven by EVs, solar infrastructure, and packaging.<\/li>\r\n<li>Priceshave rebounded from their 2020 lows, averaging $2,580\/MT in China and $3,095\/MT in Europe, reflecting regional energy costs and tariffs.<\/li>\r\n<li>India\u2019s demand is estimated at 2.2 million metric tons, with imports still playing a major role due to limited domestic smelting capacity.<\/li>\r\n<\/ul>\r\n<h3><strong><b>Trading Insight<\/b><\/strong><\/h3>\r\n<p>This kind of event-driven volatility\u2014like the aluminium can shortage\u2014can be spotted early through news flow and inventory data. For short-term traders, it\u2019s a reminder that technical analysis works best when paired with real-world context. A sudden spike in demand from packaging or auto sectors, or a policy change like tariffs or certification rules, can shift prices even if global supply remains stable.<\/p><\/div>\n<div id='text_slider_slide04' class='sa_hover_container' data-hash='Aluminium-Contracts-on-MCX' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>14.4 <\/strong><strong><b>Aluminium Contracts on MCX<\/b><\/strong><\/h2>\r\n<h2 style=\"text-align: left\">\u00a0<\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Warning-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Warning-rafiki.svg\" \/><\/a><\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I\u2019m thinking of trading aluminium. What are the contract options?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0MCX offers two: the standard contract with 5 metric tons and the mini with 1 metric ton. Both are quoted per kg and settled monthly.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So the mini is better for retail traders?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Yes. Lower margins, smaller tick value, and manageable exposure. Great for short-term strategies and learning the ropes.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0And the standard one suits bigger players?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. It offers deeper liquidity and higher tick value\u2014ideal for institutions and high-volume traders.<\/p>\r\n<p>Aluminium is a popular base metal on MCX, offering two distinct futures contracts: the Standard Aluminium Contract and the Aluminium Mini Contract. Both are quoted per kilogram and settled monthly, but they differ significantly in lot size, margin requirements, and tick value\u2014making them suitable for different types of traders.<\/p>\r\n<p>Let\u2019s break down each contract and understand how they work in practice.<\/p>\r\n<p><strong><b>Standard Aluminium Contract (5 MT)<\/b><\/strong><\/p>\r\n<p>This is the larger of the two contracts and is typically favoured by institutional traders or high-volume participants. The daily traded value averages around \u20b9375 crore, and on active days, it can exceed \u20b9500 crore. While not as large as gold or crude oil, aluminium still offers excellent liquidity and tight spreads.<\/p>\r\n<p><strong><b>Contract Specifications:<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Parameter<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Value<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Price Quote<\/p>\r\n<\/td>\r\n<td>\r\n<p>Per kilogram<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Lot Size<\/p>\r\n<\/td>\r\n<td>\r\n<p>5 metric tons (5,000 kg)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Tick Size<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b90.05<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>P&amp;L per Tick<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b90.05 \u00d7 5,000 = \u20b9250<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Expiry<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last trading day of the month<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Delivery Unit<\/p>\r\n<\/td>\r\n<td>\r\n<p>10 metric tons<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>Example (October 2025):<\/b><\/strong><\/p>\r\n<p>Let\u2019s say aluminium is trading at \u20b9262.60\/kg. The contract value would be:<\/p>\r\n<p>If the price moves by one tick (\u20b90.05), your profit or loss would be:<\/p>\r\n<p><strong><b>Margin Requirements:<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>NRML (Overnight)<\/b><\/strong>: ~5.6% \u2192 \u20b973,528<\/li>\r\n<li><b><\/b><strong><b>MIS (Intraday)<\/b><\/strong>: ~2.8% \u2192 \u20b936,764<\/li>\r\n<\/ul>\r\n<p><strong><b>Aluminium Mini Contract (1 MT)<\/b><\/strong><\/p>\r\n<p>This contract is designed for retail traders and those looking for smaller exposure. It\u2019s ideal for short-term strategies and technical setups, with manageable risk and lower capital requirements.<\/p>\r\n<p><strong><b>Contract Specifications:<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Parameter<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Value<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Price Quote<\/p>\r\n<\/td>\r\n<td>\r\n<p>Per kilogram<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Lot Size<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 metric ton (1,000 kg)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Tick Size<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b90.05<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>P&amp;L per Tick<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b90.05 \u00d7 1,000 = \u20b950<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Expiry<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last trading day of the month<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Delivery Unit<\/p>\r\n<\/td>\r\n<td>\r\n<p>10 metric tons<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>Example <\/b><\/strong><\/p>\r\n<p>If aluminium mini is trading at \u20b9262.60\/kg, the contract value is:<\/p>\r\n<p>A single tick movement gives:<\/p>\r\n<p><strong><b>Margin Requirements:<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>NRML<\/b><\/strong>: ~5.7% \u2192 \u20b914,968<\/li>\r\n<li><b><\/b><strong><b>MIS<\/b><\/strong>: ~2.8% \u2192 \u20b97,484<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide05' class='sa_hover_container' data-hash='Key-Takeaway' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2><strong><b>14.5 <\/b><\/strong><strong><b>Key Takeaway<\/b><\/strong><\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\" \/><\/a><\/p>\r\n<ul>\r\n<li>The Sumitomo Copper Scandal highlights the dangers of unchecked leverage and market manipulation.<\/li>\r\n<li>Copper is a vital industrial metal, used in EVs, infrastructure, electronics, and renewable energy.<\/li>\r\n<li>Copper demand is macro-sensitive, reacting to global data like PMI, Fed decisions, and Chinese output.<\/li>\r\n<li>MCX offers standard and mini copper contracts, with different lot sizes and margin requirements.<\/li>\r\n<li>Aluminium is the most abundant industrial metal, used across aerospace, construction, packaging, and electronics.<\/li>\r\n<li>Aluminium production is energy-intensive, making prices sensitive to power costs and policy shifts.<\/li>\r\n<li>India\u2019s aluminium demand is rising, driven by infrastructure, EVs, and smart city projects.<\/li>\r\n<li>MCX aluminium contracts come in standard (5 MT) and mini (1 MT) formats, catering to different trader profiles.<\/li>\r\n<li>Event-driven volatility\u2014like the 2025 aluminium can shortage\u2014can create short-term trading opportunities.<\/li>\r\n<li>Both copper and aluminium are excellent for technical analysis, offering liquidity, responsiveness, and macro relevance.<\/li>\r\n<\/ul>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide06' class='sa_hover_container' data-hash='Fun-Activity' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2><strong><b>14.6 <\/b><\/strong><strong><b>Fun Activity<\/b><\/strong><\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\" \/><\/a><\/p>\r\n<p><strong>Fill in the blanks:<\/strong><\/p>\r\n<ol>\r\n<li>Copper Mini contract has a tick size of \u20b90.05 and a lot size of 250 kg. \u2192 P&amp;L per tick = _______<\/li>\r\n<li>Aluminium Mini contract has a tick size of \u20b90.05 and a lot size of 1,000 kg. \u2192 P&amp;L per tick = _______<\/li>\r\n<\/ol>\r\n<p><strong>Answers:<\/strong><\/p>\r\n<ol>\r\n<li>\u20b90.05 \u00d7 250 = \u20b912.50<\/li>\r\n<li>\u20b90.05 \u00d7 1,000 = \u20b950<\/li>\r\n<\/ol><\/div>\n<\/div>\n<\/div>\n<script type='text\/javascript'>\n\tjQuery(document).ready(function() {\n\t\tjQuery('#text_slider').owlCarousel({\n\t\t\titems : 1,\n\t\t\tsmartSpeed : 400,\n\t\t\tautoplay : false,\n\t\t\tautoplayHoverPause : false,\n\t\t\tsmartSpeed : 400,\n\t\t\tfluidSpeed : 400,\n\t\t\tautoplaySpeed : 400,\n\t\t\tnavSpeed : 400,\n\t\t\tdotsSpeed : 400,\n\t\t\tdotsEach : 1,\n\t\t\tloop : false,\n\t\t\tnav : true,\n\t\t\tnavText : ['Previous','Next'],\n\t\t\tdots : true,\n\t\t\tresponsiveRefreshRate : 200,\n\t\t\tslideBy : 1,\n\t\t\tmergeFit : true,\n\t\t\tautoHeight : true,\n\t\t\tmouseDrag : false,\n\t\t\ttouchDrag : true\n\t\t});\n\t\tjQuery('#text_slider').css('visibility', 'visible');\n\t\tvar owl_goto = jQuery('#text_slider');\n\t\tjQuery('.text_slider_goto1').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 0);\n\t\t});\n\t\tjQuery('.text_slider_goto2').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 1);\n\t\t});\n\t\tjQuery('.text_slider_goto3').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 2);\n\t\t});\n\t\tjQuery('.text_slider_goto4').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 3);\n\t\t});\n\t\tjQuery('.text_slider_goto5').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 4);\n\t\t});\n\t\tjQuery('.text_slider_goto6').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 5);\n\t\t});\n\t\tvar resize_75471 = jQuery('.owl-carousel');\n\t\tresize_75471.on('initialized.owl.carousel', function(e) {\n\t\t\tif (typeof(Event) === 'function') {\n\t\t\t\twindow.dispatchEvent(new Event('resize'));\n\t\t\t} else {\n\t\t\t\tvar evt = window.document.createEvent('UIEvents');\n\t\t\t\tevt.initUIEvent('resize', true, false, window, 0);\n\t\t\t\twindow.dispatchEvent(evt);\n\t\t\t}\n\t\t});\n\t});\n<\/script>\n<\/p>                    <\/div>\n\t\t        \n                    <div id=\"videos-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"videos-tab\">\n\t\t\t\t                            <\/div>\n\t\t                    <\/div>\n        <\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Study Slides Videos 13.1 The Sumitomo Copper Scandal: A Case Study in Market Manipulation and Risk Varun:\u00a0Isha, I came across something called the Sumitomo Copper Scandal. What was that about? Isha:\u00a0Ah, that\u2019s one of the most famous cases of market manipulation. A trader named Hamanaka tried to control global copper prices by hoarding physical copper &#8230; <a title=\"Copper and Aluminium\" class=\"read-more\" href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/copper-and-aluminium\/\" aria-label=\"Read more about Copper and Aluminium\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":13805,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"class_list":["post-75500","markets","type-markets","status-publish","format-standard","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/75500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets"}],"about":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/types\/markets"}],"author":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/comments?post=75500"}],"version-history":[{"count":5,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/75500\/revisions"}],"predecessor-version":[{"id":75529,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/75500\/revisions\/75529"}],"up":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/13805"}],"wp:attachment":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/media?parent=75500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/categories?post=75500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}