How will the change in settlement type affect Aluminium and Zinc March/April contracts?
As per SEBI guidelines, Aluminium contracts from the month of March 2019 and Zinc contracts from the April 2019 will be physically settled. You can find the exchange circular here.
For the cash-settled contracts, the MCX traded price is LME's Aluminium/Zinc spot price(converted into INR using RBI Reference rates). But since the settlement type has changed to physical delivery, the cost of delivery increases the price of these contracts(Adding up Customs Duty, CIF, etc). Calculations of the parity/disparity due to physical delivery(Cost of Insurance, Freight, Customs Duty, etc) to arrive at the new spot price is explained in this TradingQ&A thread
MCX has also released a separate spot market price for these physically settled contracts. You can find them here.
Note: March contracts onwards for Aluminium and April contracts for Zinc have to be treated separately as per the new spot price.
Note: Alumini/Zincmini contracts are also physically settled.