I am from India and I plan to build a new own home next year. The present price of steel is lower than in past years. Is it worthwhile to buy steel from commodity exchanges now and then switch to physical steel while I build home? Will it be profitable?

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    +1 because although it's a terrible idea (IMO), it's a reasonable question for this site. – AakashM Mar 2 '16 at 9:02
  • Can you give a brief why it's a terrible idea? – Gowri Mar 2 '16 at 9:13
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    Among many other reasons, futures contracts for steel are usually sold on the order of 10-20 tons/contract. I'm no builder, but most residential construction doesn't use that much steel (nor would it come in a usable form for your purpose). As far as "will it be profitable?", you'd be placing a bet on that with someone else. That person likely trades commodities for a living and he's taking the other side of the trade. That's not a great sign for you. – Zach Lipton Mar 2 '16 at 18:02

I am not aware of Steel being offered as commodity in India on regulated exchange. Even if there is one, generally it would be sheets/rolls. These are not directly fit for use. One would need to convert these into required rods by melting process.

Most commodities in India are for future deliveries so if you buy something, on the specified date you would have to physically take possession or sell at spot. Generally goods are delivered at designated warehouses and you would have to arrange for shipment to your location on your own. On the execution date you would have to start paying for warehouse charges etc.

So generally for individuals it is not advisable to get into commodity trading that to for a small specific purpose.

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