A STUDY ON IMPACT OF PRICE MOVEMENT OF

COPPER COMMODITY
Project submitted in partial fulfilment of the requirements for the

Award of the degree of

MASTER OF BUSINESS ADMINISTRATION

OF

BANGALORE UNIVERSITY

By

DAYALA HEMANTH REDDY

Reg. No. 17YUCMD057

Under the guidance of

Guide Name: Prof. M VISHWANATHAN

Guide Designation: PROFESSOR

ACHARYA BANGALORE B-SCHOOL

Bangalore University

2018 – 2019

i
DECLARATION BY THE STUDENT

I hereby declare that “A STUDY ON IMPACT OF PRICE MOVEMENT OF

COPPER COMMODITY” is the result of the project work carried out by me
under the guidance of Prof. M Vishwanathan in partial fulfilment for the award of
Master’s Degree in Business Administration by Bangalore University.

I also declare that this project is the outcome of my own efforts and that it has not
been submitted to any other university or Institute for the award of any other
degree or Diploma or Certificate.

Place: Bangalore Name: Dayala Hemanth Reddy

Date: 31 – 12 – 2018 Register Number: 17YUCMD057

ii
 BANGALORE UNIVERSITY
Certificate of Originality (Plagiarism)

Name of the Student : DAYALA HEMANTH REDDY

Registration Number : 17YUCMD057

: A STUDY ON IMPACT OF PRICE MOVEMENT OF COPPER

Title of Project COMMODITY

Name of the Guide : PROF. M VISHWANATHAN

Similar Content (%) Identified : 3

(Acceptable maximum limit of similarity 25%)

Project ID number(s) in : 181227120742

DrillBit

The Project report has been checked using DRILLBIT anti-plagiarism

Software (Attach first page of the originality report as ANNEXURE) and found within limits as

per plagiarism Policy and instructions issued by the UNIVERSITY/CBSMS.

We have verified the contents of the project report, as summarized above and

certified that the statements made above are true to the best of our knowledge and belief.

Signature of the Guide Signature of the Principal/Director

iii
CERTIFICATE OF ORIGINALITY

Date:

This is to certify that the dissertation titled “A STUDY ON IMPACT OF PRICE

MOVEMENT OF COPPER COMMODITY” is an original work of Mr. Dayala
Hemanth Reddy; bearing University Register Number 17YUCMD057 and is
being submitted in partial fulfilment for the award of the Master’s Degree in
Business Administration of Bangalore University. The report has not been
submitted earlier either to this University /Institution for the fulfilment of the
requirement of a course of study.

Signature of guide Signature of Director

Date: Date:

iv
 ACKNOWLEDGEMENT

I am feeling very happy and honour after completing my project titled “A

STUDY ON IMPACT OF PRICE MOVEMENT OF COPPER
COMMODITY”

I also extended my sincere thanks to our respected Director Dr. H R

VENKATESHA for his valuable guidance and encouragement.

I also extended my sincere thanks to Prof. M VISHWANATHAN, MBA

Department who have guided me during completion of project report.

Finally, I wish to thank all my teachers, friends and my parents from whom I
received a generous help directly or indirectly.

Dayala Hemanth Reddy

v
 TABLE OF CONTENTS

CHAPTER PARTICULARS PAGENO.

NO.
List of Tables
List of Figures
Executive Summary
I Introduction 1–8
II Industry profile 9 – 16
III Research Methodology 17 – 20
IV Data Interpretation and 21 – 46
analysis
V Findings, Suggestions, 47 – 48
Conclusions
Bibliography

vi
 LIST OF TABLES

Table No. Description Page No.

1.1 Mine production in the world 6
1.2 Production, imports and exports of copper 7
commodity in India
4.1 Correlation data of copper and US Dollar 24
4.2 Regression analysis data of copper and US 27
Dollar
4.3 correlation data of copper and BSE – 31
SENSEX
4.4 Regression analysis data of copper and BSE 34
- SENSEX
4.5 Fluctuate of Copper prices with 39
comparisons of US Dollar
4.6 Fluctuate of Copper prices with 43
comparisons of BSE – SENSEX Index

vii
 LIST OF FIGURES/GRAPHS

Figure Description Page No.

No.
1.1 Average daily turnover of Indian Commodity 4
Market
2.1 List of commodity exchanges in India 11
4.1 The movement of copper prices from 01-08- 41
2018 to 11-10-2018
4.2 The movement of US Dollar to INR rates from 42
01-08-2018 to 11-10-2018
4.3 The movement of copper prices from 01-08- 45
2018 to 11-10-2018
4.4 The movement of BSE – SENSEX Index from 46
01-08-2018 to 11-10-2018.

viii
 Executive Summary

Any product which exists naturally and serves as an input for the secondary
market can be described as a commodity. They can be classified as a agricultural
products like cotton, pepper, jute etc. or non-agricultural products like crude oil,
energy, gold, copper, aluminium and so on.

Agricultural products are prone to spoilage and their availability is dependent on

weather condition, their market is volatile. Non-agricultural products like crude
oil, energy, copper are useful more to the industries for producing and deliverable
of secondary goods and are generally preferred by investors in commodity
markets.

Metals are the key important intermediate for industrial production. There are
different metals from base metals (Copper, Aluminium, Lead, Zinc, and Nickel) to
precious metals (Gold and Silver) majorly contributed for economic development.

The present study focused on the price movement of the copper commodity,
which is a non-ferrous base metal and its impact on Indian metal market. There
are various microeconomic and macroeconomic factors affects the prices of
commodities like demand and supply, exchange rates, trade policies and industrial
growth. This study helps to find out relation between price-movement of copper
commodity, US Dollar and BSE SENSEX.

ix
 CHAPTER – 1

INTRODUCTION

1
 INDUSTRY SCENARIO
Indian commodity market comprises of trading commodities in both retail,
wholesale market and in commodity future markets. Commodity markets are the
main important integral part of financial markets. It consists of trading in both
agricultural and non-agricultural commodities traded in recognised stock
exchanges regulated by securities exchange board of India. It is the market where
wide range of products are exchange and traded like precious metals, base metals,
energy, crude oil and soft commodities like cardamom, cotton, rubber etc.

Indian economy is at the broader side a fairy story over the centuries. Its overall
performance in terms of the output increase has been remarkably and distinctly
great. India stands top in the production of jute, jute-like fibers, pulses and milk, is
on the second one position in groundnut, vegetables, culmination, cotton, rice, and
wheat and sugarcane manufacturing, and is a leading producer of fisheries,
rooster, cattle, spices and plantation plants. It contributes to about one-fifth of the
gross domestic product (GDP) of our country.

1.1 Overview of Indian commodity market

Every commodity that is produced finally comes into the market where the goods
are bought and sold. Commodity markets plays an essential role in the economies
of a country where contributes to the maximum amount of GDP contribution.

India contributes a large number of agriculture production. Most of the farmers

contributing their time and work for the agriculture have facing a risk in terms of
prices for their products. Price may go varies between the time of farming and
harvesting the crops. They can shift the prise risk towards hedging their products
through the derivatives.

Firstly, the commodity market organised in the 19th century, Bombay Cotton
Exchange was setup in the year 1875 by Bombay Cotton Trade association LTD.
Eventually a number of trade associations for trade in derivatives were came up
with various commodities in various parts of the country. Key associations among
them are Gujarati Vyapara Mandali in 1900 facilitates future trades in oil seeds,

2
futures trade in gold by Bombay Bullion association in 1920, and the other trade
exchanges facilitating futures trade in commodities like jute, pepper, spices etc.

The commodity futures market regulated by the Forward markets commission

under the forward contract regulation act, 1952 in order to regulate the commodity
trade associations. It applies to the whole exchanges in India where commodity
transactions takes places.

Indian commodity future markets works well until the early 1960’s. Later, its
advancement was nearly going down on being various constraints due to leading
in inflation and restricting components to prohibit trade in large number of
commodities presented by the Government of India. In the year 2003, it revives of
futures trading in commodities and started operations in three national level
commodity exchanges.

Commodity future markets shows a positive presence in developing countries. In

the occasions passed by the individual governments in a significant number of
these nations had unsettled future markets. If they were not close, their operations
would appeared by regulations. Moreover, if we see the earlier trends the
expansion of commodity future markets is being go after aggressively and
completely with the help of government. The government expects cumulative
benefits in terms of better allocation of resources, price discovery and risk
management. There was always a price divergence because of irregular
information in the market.

1.2 Growth and development

Commodity futures trading in our country has growing multiple times since its
resurrection happen in the year 2003. The average daily turnover of Indian
commodity futures have increased constantly and sharp movement from INR 1970
crores per day in 2004 – 05 to a peak of about INR 58471 crores per day in 2011 –
12. However, after it has started downwards to INR 55891 crores per day in 2012
– 13 and steeply downwards to INR 32725 crores per day in 2013 – 14 and
subsequently about INR 24965 crores per day in 2016 – 17. This fall happened
due to following the commodities transaction tax on trade of non-agriculture

3
future contracts and the breaking out of the payment crisis at a spot exchange in
2013. However, commodity derivative volumes expected to grow again the
introduction of options contract and participation of alternative investment funds.

Figure 1.1 Average daily turnover of Indian Commodity Market

AVERAGE DAILY TURNOVER OF INDIAN

COMMODITY FUTURES MARKET (INR CRORES)
70000
60000
50000
40000
30000
20000
10000
0
2004 - 2005 - 2006 - 2007 - 2008 - 2009 - 2010 - 2011 - 2012 - 2013 - 2014 - 2015 - 2016 -
05 06 07 08 09 10 11 12 13 14 15 16 17

AVERAGE DAILY TURNOVER OF INDIAN COMMODITY FUTURES MARKET (INR CRORES)

Source: www.mcxindia.com

Currently, the national level commodity exchanges extended its offerings around
40 commodity contracts under various classes of products in precious metals, base
metals, energy and agricultural commodities like oil and oil seeds, spices, fiber
and other products. In the past ten-year’s bullion plays a significant role in
commodity markets.

Energy and base metals have additionally increased considerable volumes since
2009-10 onwards while volumes in agriculture commodity items remained
altogether lower than that in any non-agriculture commodities.

1.3 Role of commodity market in the country’s development:

As the constituents of commodity markets environment are advanced, the Indian

economy profited. Rise in the outlined commodity markets and their constituents
promotes that there would be a phenomenal advantage and benefits arise to the
Indian economy in terms of business development and increase in employment
opportunities.

4
India is exporting commodities in bulk manner and there is scope for diminishing
price risk of international commodities in Indian economy as a total. The prices of
commodities are very volatile in nature, thereby, indicates the need for organised
commodity derivatives exchanges for the parties in the commodity markets
ecosystem. It believes that generally growth of a commodity market is positive
side development of an economy.

The Indian commodity market will play a main important role in our country’s
future economic growth, a seminar on ‘Agribusiness and Commodities Price Risk
Management’ (Chathurved, 2012) .

The countries main growth sectors in future are textile, food, infrastructure,
housing and energy are commodity in deep.

1.4 Copper Commodity market – Global scenario

In spite of having a strong economy, India's offer in the worldwide item showcase
is not as large as assessed. With the exception of gold, the offer in different areas
of the item showcase is not exceptionally noteworthy.

India represents 3% of the worldwide oil consumption and 2% of worldwide

copper consumption. In agriculture, India's commitment to global exchange
volume is less production with compared to base accessible. Different foundation
advancement extends that are being attempted in India are being viewed as a key
development driver in the coming days.

Economic, technological and societal factors influence the supply and demand of
copper. As society's need for copper increases, new mines and plants introduced
and existing ones expanded.

Land-based resources are estimated at 1.6 billion tons of copper, and resources in
deep-sea nodules are estimated at 0.7 billion tons. The global production of
refined copper is around 15 million tons. The major copper-consuming nations are
Western Europe (28.5%), the United States (19.1%), Japan (14%), and China
(5.3%).

5
Copper and copper alloy scrap composes a significant share of the world's supply.
The largest international sources for scrap are the United States and Europe. Chile,
Indonesia, Canada and Australia are the major exporters and Japan, Spain, China,
Germany and Philippines are the major importers.

Table 1.1 shows about mine production in the world

(000 tonnes)

World 2013 2014 2015 2016 2017

Scenario

Mine production 18185 18431 19132 20216 20000

Primary Refined 17257 18565 18924 194311 19441

production

Secondary 3803 3915 3945 3877 4064

Refined
production

Source: Ministry of mines, Ministry of commerce and industry

1.5 Indian market scenario of copper commodity

Metals are the key important intermediate for industrial production. There are
different metals from base metals (Copper, Aluminium, Lead, Zinc, and Nickel) to
precious metals (Gold and Silver) majorly contributed for economic development.

The volume of Indian copper industry consumed around five lakh tonnes of
refined copper per annum. Present there are three major players dominate the
Indian Copper Industry. They are Hindustan Copper Limited (HCL) in public
sector, Sterlite Industries (Vedanta Company) & Hindalco Industries in private
sector.

Annual Report of Ministry of mines, government of India 2017-18 says that,

Copper ore production in India stood at 3,846 thousand tonnes in 2016-17.The

6
production of copper concentrates at 135 thousand tonnes decreased by 11% in
2016-17 as compared to that in the previous year. India's consumption demand for
refined copper stood at 820 thousand tonnes in the FY16.

Table 1.2 Shows about production, imports and exports of copper

commodity in India

Copper fundamentals: (000 tonnes)

particulars 2013 - 14 2014 - 15 2015 - 16 2016 - 17 2017 - 18

Production 644 766 790 796 842

Imports 305 356 471 507 710

Exports 333 460 416 453 511

Consumption 455 440 462 - -

Source: Ministry of Mines; Ministry of commerce and Industry

1.6 Factors influencing the commodity markets

Commodity markets will affect due to various factors are as follows

1. Risk and returns of the investors in commodity derivatives.

2. Price variations in domestic and international markets.

3. Demand and supply of commodities in domestic and international markets.

4. Economic factors like industry growth which towards the help in growth
of GDP, global financial crisis where there is a huge destruction in
markets, Inflation and recession.

5. Government trade policies like taxes and Geo political events.

6. Some specific events like natural disaster, supply interruption and industry
reconstruction.

7
1.7 Factors of price determination in commodity markets

Future prices of commodities decided by the demand and supply force for a
specific item in the market. The prises of commodity rises if the purchase volumes
out sales volumes and vice versa.

The prices in future markets are determined by the agreement entered by the buyer
and seller bargaining for the price quotes called as buy and sell quotes. In
addition, different participants as speculators, arbitrageurs and hedgers are also
plays a main role in the markets based on the market performance and it is
influences the prices of commodities.

8
 CHAPTER – 2

PROFILE OF THE INDUSTRY

9
 INDUSTRY PROFILE

Commodity markets are the markets where all agriculture and non-agriculture
commodities traded in recognised exchanges regulated by the Securities Exchange
Board of India (SEBI). Commodities that traded in two ways that is over the
counter and in the recognised exchanges. Also there exist that commodities are
traded in both spot prices and in derivatives segments in options and futures.

The Securities Exchange Board of India regulates all commodity exchanges in

India. Previously, it was administrative under the Forward Market commission –
the forward contracts regulation act, 1952. Moreover, in the year 2015 the
regulatory of commodity derivatives will shift to the SEBI – Securities contract
regulation act 1956.

2.1 Commodity exchanges in India:

A Commodity Exchange is associate degree exchange wherever numerous

commodities, derivative product, agricultural products and different raw materials
are unit listed and traded. Most of the commodity markets across the planet
exchange commodities like wheat, barley, sugar, maize, cotton, cocoa, coffee, oil,
metals, etc. Commodities exchanges typically trade futures contracts on
commodities.

A commodity exchange is an association, or a company or any other body

corporate organizing futures trading in commodities. A commodities exchange is
an exchange where various commodities and derivatives products are traded. Most
commodity markets across the world trade in agricultural products and contracts
based on them. These contracts can include spot prices, forwards, futures and
options on futures. As of now, there are five-commodity exchange market in
India. These six exchanges are explained below one by one.

10
2.2 List of commodity exchanges in India

Figure 2.1 showing list of commodity exchanges in India

Commodity
Exchanges

National Commodity Regional Commodity

Exchanges Exchanges

1. MCX 16 Regional
2. NCDEX commodity
3.NMCE exchanges
4. ICEX
5. ACDEX
6.UCX

2.2.1 Multi Commodity Exchange

The Multi commodity exchange (mcx) is the first listed exchange, could be a
progressive, commodities derivative exchange that facilitates on-line
commercialism and clearing and settlement of derivative transactions, thereby
providing a platform for risk management. It started operations in the year
November 2013.

MCX is in a style for mercantilism in metals and energy contracts. MCX offering
the products to trade in Bullion market like Gold and Silver, Base metals like
Copper, Aluminium, Brass, Zinc, Lead and Nickel. Energy like crude oil and
natural gas. Agricultural products like cardamom, cotton, castor seeds etc.

MCX is the world’s largest exchange in silver, the second largest in gold, copper
and gas and the third largest in crude futures. However, exchange listed
commodities contribute for less than a fifth of the overall volume of commodities
listed in India. Internationally, the commodities market in commodities is 30-40

11
times the scale of the underlying physical artefact trade. The upper the number,
many of finely the goods worth risks will unfold across the market.

2.2.2 National commodity and derivative exchange limited

The National commodity and derivative exchange limited (NCDEX) is an expertly

overseen on-line multi ware trade. The investors of NCDEX includes gigantic
national dimension establishments, huge open area bank and firms. NCDEX offers
a progressively number of favourable circumstances that are by and by quickly
give inside the product markets. The investors of NCDEX are recognized players
in their few fields, pass on them with the institutional building background, trust,
across the nation achieve, innovation, and hazard the board aptitudes. NCDEX is
an open constrained organization consolidated on April 23, 2003 under the
Companies Act, 1956 (NCDEX, 2018)

These are two stock exchanges where it offers to trade in copper commodity in
spot market and derivatives in futures and options.

2.2.3 National Multi Commodity Exchange

National Multi Commodity Exchange of India Ltd. was at first promoted by

Kailash Gupta an Ahmedabad based broker and central warehousing corporation
(CWC) later other institutional investors added into it. NMCE is offering the
products to trade in oil and oil seeds, spices and other products like rubber, raw
jute etc.

2.2.4. Indian Commodity Exchange

The Indian commodity Exchange Ltd. is online commodity derivative exchange. It

aims to afford in future trading products in agriculture products like oil and seeds,
spices, fiber. Non-agriculture products like steel and diamonds. It is the first
exchange launched diamond derivative contracts.

2.2.5 Ace Derivatives and commodity exchange

The Ace Derivatives and commodity exchange is also a commodity exchange

with over 50 years of experience in commodity markets. It has become a national

12
exchange by upgrading its self from a regional stock exchange namely
Ahmedabad commodity exchange.

2.2.6 Universal commodity exchange

Universal commodity exchange was India’s sixth national level commodity

exchange. It receives approval in 2012 and started operations in 2013. However,
in the year 2014 it is shutdown its operations.

2.3 Regional commodity exchanges

Besides the six national level commodity exchanges, there are sixteen more
regional level commodity exchanges which offers specific commodities to trade
rather than multi commodities and are not demutualised. Most of these regional
exchanges are not digitalised. Therefore, there is a chance of price discovery
manipulation and less transparency in market. The list of regional stock exchanges
are as follows.

1. Bikaner Commodity Exchange Limited

2. Bombay Commodity Exchange Limited

3. Central India Commercial Exchange Limited

4. Chamber of Commerce

5. Cotton Association of India

6. East India Jute & Hession Exchange Limited

7. First Commodities Exchange of India Limited

8. Haryana Commodities Limited

9. India Pepper & Spice Trade Association

10. Meerut Agro Commodities Exchange Company Limited

13
 11. National Board of Trade

12. Rajkot Commodity Exchange Limited

13. Rajdhani Oils and Oilseeds Exchange Limited

14. Surendranagar Cotton Oil & Oilseeds Association Limited

15. Spices and Oilseeds Exchange Limited

16. Vijay Beopar Chamber Limited

2.4 Major segments of commodities

The various segments of commodities in markets as follows

Bullion: Gold and Silver

Oil and Oil seeds: Castor seeds, Copra, Soy Seeds, Castor Oil, Refined Soy Oil,
Soya meal, Crude Palm Oil, Cotton Seed, Guar seed.

Base Metals: Aluminium, Brass, Copper, Lead, Nickel and Zinc

Pulses: Chana

Cereals: Wheat, Maize

Energy: Crude oil and Natural gas

Others: Rubber, Guar Gum, Sugar

2.5 Functions of commodity exchanges

Commodity derivatives exchange needs to provide a seamless trading platform

with a fair, transparent and financially secure trading environment in keeping with
the robust risk management practices. It should have a suitable risk management
mechanism, normally in the form of a clearinghouse (owned by the exchange or

14
by another operator) that ascertains the credit-worthiness of the parties of a
contract and ensures the execution of contracts. It is especially serves as a legal
counter-party between each buyer and each seller of a derivatives contract on the
exchange and called as a central counter party.

Some key functions are as follows:

1. Giving and implementing standards and directions for uniform and

reasonable exchanging practice

2. Facilitating trading activities in transparent manner and ensuring execution

of contracts in commodity markets

3. Maintaining a record of daily transactions including price movements,

number of volumes traded and market news to the market participants.

4. Dispute settlement mechanism.

5. Designing the standardised trading contracts for all kind trading

commodities in exchanges.

2.5 Market participants

A standardised market requires a large number of market participants with various

risk profiles. The market participants are Speculators, Arbitrageurs and Hedgers.

2.5.1 Speculators:

Speculators is a person who invests in stock property and other ventures in the
sense of making profits. Speculators utilises their strategies and typically a short
time in an attempt to outperform traditional long-term investors. They take risk
especially with respect to future price movements and they hope of making profits
that are large enough to cover the risk. For example, a speculator invest their
money in long-term like derivatives, commodities.

15
2.5.2 Hedgers:

A Hedger is a person who do not want to take any risk while investing. Hedge is a
risk management technique used to reduce any substantial loss or gain suffered by
an individual or organisation. They always try to skip the risk. A hedger is a short-
term trader or intraday trader. He used to trade in two different markets or
exchanges. For example, a person buy stocks in NSE and he sells his stocks in
BSE with a minimum gains.

2.5.3 Arbitrageurs:

Arbitrage is a type of participant who do not want to take risks while markets are
performing bad or high fluctuations in market. They use to make risk free profit.
For example, a person invests their money in markets for short-term and make risk
free profits.

16
 CHAPTER – 3

RESEARCH DESIGN

17
 Design of project report

The present study is conducted to find out relation between price-movement of

copper commodity, US Dollar and BSE SENSEX.

3.1 Literature review

Commodity prices are mainly determined by demand and supply. Too much
supply of copper brings down prices while heavy demand brings up prices. Supply
comes from inventories and production from copper mines. Demand comes from
users and uses. The more volume and types of use for copper, the bigger the
demand. The higher the demand and the lower the supply, the higher the price.
Romualdez (2010)

Keynes (1950) provides discussions of the behaviour of commodity prices and the
relationship between commodity price, production and stock levels. If we ignore
hedging costs, then Keynes' argument is simply that when stocks are high, the
difference between futures prices and spot price reflects the cost of storing or
carrying spot prices but when stocks are low, commodity prices tend to reflect the
value of immediate consumption and the link to the value in storage is broken. For
example, spot price could exceed the futures price when stocks are low.

Moreover, IMF (2010) revisited in their study on the issue of speculation in

commodities markets, given conclusion that fundamentals largely determine
commodity prices, as there is little evidence that financial investment has a
significant impact on commodity prices beyond the current and expected supply
demand fundamentals (IMF, 2010)

Fama and French (1987) examined whether the futures prices for copper
commodity and other commodities contain evidence of forecast power or
systematic risk premiums for the period 1967-1984. They showed that the copper
futures price contains suggestive evidence of both systematic risk premiums and
forecasting power (French, 1987)

18
3.2 Statement of the problem

Commodity markets are very volatile in nature. The commodity prices are wholly
dependent on demand and supply in domestic and international markets. Change
in price of one commodity will affect the prices for other commodities. The
impact of price movement will affect Industrial production and construction,
economic development, investors in the commodity market.

3.3 Objectives of the study:

 To study various factors affecting the price of the copper commodity.

 To study the impact of the change in copper price on the other commodities
and currency.

 To suggest measures based on a study conducted.

3.4 Scope of study

 The study is conducted to find the degree relationship between Commodity

prices and currency rate, market rates.

 To find the various factors affecting the price of copper commodities by

micro and macro-economic factors.

3.5 Research methodology:

The study is conduct to find the change in the price of one variable (COPPER) for
a given amount of other variables (USD and SENSEX).

3.6 Data collection:

This research is all depending on secondary data, which is the prices of the
commodities and Currency rates, are collected from Multi Commodity Exchange
of India LTD (MCX), Bombay Stock Exchange LTD (BSE SENSEX) and other
industry reports, newspapers, magazines.

19
3.6 Sampling:

The fundamental purpose of this study is to examine whether copper prices affects
the SENSEX, US DOLLAR. To check this the past 50 days of copper and gold
prices, US Dollar rate and Sensex data has taken from their registered websites.

3.7 Plan of Analysis:

Data will be collected through secondary data and will be analysed with the help
of statistical tools Karl Pearson’s Co-efficient followed with economic model of
Regression analysis.

Karl Pearson’s correlation coefficient is used to study the correlation between

Independent variable of copper commodity and the dependent variable of US
Dollar, Sensex

Regression analysis is a statistical tool to determine the change in one variable for
the given amount of change in another. It studies the nature of the relationship
between the variables.

3.8 Limitations of the study

 The present study is restricted to analysis of correlation co efficient and

regression. So it is not going further tests.

 The quality of secondary data is limited to the sources that I have taken to
conduct the study.

3.9 Chapter scheme

Chapter 1: Industry Scenario

Chapter 2: Profile of commodity exchanges

Chapter 3: Design of project report

Chapter 4: Data interpretation and analysis

Chapter 5: Findings

20
 CHAPTER – 4

DATA ANALYSIS AND INTERPRETATION

21
 DATA ANALYSIS AND INTERPRETATION

As discussed in the research methodology, this chapter brings out the data analysis
and further interpretation being on the same as the follow sections below:

Karl Pearson’s correlation coefficient (r):

Karl Pearson’s correlation coefficient is used to measure correlation between

variable X and variable Y. It is denoted by ‘r’ and it is also called as “Pearson’s
r”.

It is shows the degree of liner relationship between two variables. It ranges from
+1 to -1. If a correlation is, +1 it means the relationship between two variables is
perfectly positive linear relationship. If the correlation is, -1 it means the
relationship between two variables is perfectly negative linear relationship. If
correlation is zero it means there is no relationship between two variables.

Mathematical formula:

The quantity r, called the linear correlation coefficient measures the strength and
the direction of a linear relation between two variables. The linear correlation
coefficient is sometimes referred to as the Pearson product moment correlation
coefficient on honour of its developer Karl Pearson.

Where N = Number of observations

∑xy = Sum of the products of paired variables

∑x = Sum of X variables

22
 ∑y = Sum of Y variables

∑x2 = Sum of squared X variables

∑y2 = Sum of squared Y variables

Regression analysis:

In statistical modelling, Regression analysis is used to measure the relationship

between two or more variables.

Regression analysis is a statistical tool to determine the change in one variable for
the given amount of change in another. It studies the nature of the relationship
between the variables.

23
MODLE-1: Relationship between copper and US Dollar

To determine the relationship between the Copper and US Dollar. By using Karl
Pearson’s correlation coefficient and regression of the data

Table 4.1 correlation data of copper and US Dollar

COPPER US DOLLAR
Date PRICES (X) RATE (Y) XY x2 y2
Oct 11,
2018 459.25 74.05 34007.4625 210910.563 5483.4025
Oct 10,
2018 458.7 74.25 34058.475 210405.69 5513.0625
Oct 09,
2018 463.2 74.34 34434.288 214554.24 5526.4356
Oct 08,
2018 456.1 74.065 33781.0465 208027.21 5485.62423
Oct 05,
2018 456.55 73.77 33679.6935 208437.903 5442.0129
Oct 04,
2018 457.2 73.63 33663.636 209031.84 5421.3769
Oct 03,
2018 464.7 73.345 34083.4215 215946.09 5379.48903
Oct 01,
2018 454.95 72.925 33177.2288 206979.503 5318.05563
Sep 28,
2018 452.95 72.51 32843.4045 205163.703 5257.7001
Sep 27,
2018 448.35 72.57 32536.7595 201017.723 5266.4049
Sep 26,
2018 456.6 72.6 33149.16 208483.56 5270.76
Sep 25,
2018 457.35 72.685 33242.4848 209169.023 5283.10923
Sep 24,
2018 459.1 72.67 33362.797 210772.81 5280.9289

24
Sep 21,
2018 458.15 72.24 33096.756 209901.423 5218.6176
Sep 20,
2018 438.85 72.015 31603.7828 192589.323 5186.16022
Sep 19,
2018 437.6 72.36 31664.736 191493.76 5235.9696
Sep 18,
2018 442 72.71 32137.82 195364 5286.7441
Sep 17,
2018 429.75 72.54 31174.065 184685.063 5262.0516
Sep 14,
2018 423.95 71.88 30473.526 179733.603 5166.7344
Sep 13,
2018 428.75 72.037 30885.8638 183826.563 5189.32937
Sep 12,
2018 429.75 72.16 31010.76 184685.063 5207.0656
Sep 11,
2018 425.55 72.64 30911.952 181092.803 5276.5696
Sep 10,
2018 426.8 72.455 30923.794 182158.24 5249.72703
Sep 07,
2018 422.6 71.79 30338.454 178590.76 5153.8041
Sep 06,
2018 424.4 71.95 30535.58 180115.36 5176.8025
Sep 05,
2018 419.65 71.755 30111.9858 176106.123 5148.78003
Sep 04,
2018 415.75 71.585 29761.4638 172848.063 5124.41223
Sep 03,
2018 423.85 71.215 30184.4778 179648.823 5071.57623
Aug 31,
2018 414 71.005 29396.07 171396 5041.71003
Aug 30,
2018 422.25 70.745 29872.0763 178295.063 5004.85503

25
Aug 29,
2018 421.95 70.535 29762.2433 178041.803 4975.18623
Aug 28,
2018 423.25 70.1 29669.825 179140.563 4914.01
Aug 27,
2018 418.5 70.165 29364.0525 175142.25 4923.12723
Aug 24,
2018 416.25 69.97 29125.0125 173264.063 4895.8009
Aug 23,
2018 410.75 70.105 28795.6288 168715.563 4914.71103
Aug 22,
2018 412.2 69.87 28800.414 169908.84 4881.8169
Aug 21,
2018 416.05 69.86 29065.253 173097.603 4880.4196
Aug 20,
2018 412.1 69.82 28772.822 169826.41 4874.8324
Aug 17,
2018 407.65 70.1 28576.265 166178.523 4914.01
Aug 16,
2018 405.4 70.09 28414.486 164349.16 4912.6081
Aug 14,
2018 416.05 69.96 29106.858 173097.603 4894.4016
Aug 13,
2018 423.6 70.02 29660.472 179436.96 4902.8004
Aug 10,
2018 419.6 68.89 28906.244 176064.16 4745.8321
Aug 09,
2018 421.15 68.76 28958.274 177367.323 4727.9376
Aug 08,
2018 418 68.66 28699.88 174724 4714.1956
Aug 07,
2018 418.1 68.63 28694.203 174807.61 4710.0769
Aug 06,
2018 415.5 68.83 28598.865 172640.25 4737.5689

26
 Aug 03,
2018 419.05 68.545 28723.7823 175602.903 4698.41703
Aug 02,
2018 416.85 68.625 28606.3313 173763.923 4709.39063
Aug 01,
2018 414.8 68.35 28351.58 172059.04 4671.7225

Therefore, Karl Pearson’s correlation coefficient ‘r’ =0.822119

To test the relationship between copper and US Dollar, it is categorised copper is

independent variable and US Dollar is dependent variable. Using regression
analysis

Table 4.2 Regression analysis data of copper and US Dollar

COPPER US DOLLAR
Date PRICES (X) RATE (Y) XY X2
Oct 11, 2018 459.25 74.05 34007.4625 210910.563
Oct 10, 2018 458.7 74.25 34058.475 210405.69
Oct 09, 2018 463.2 74.34 34434.288 214554.24
Oct 08, 2018 456.1 74.065 33781.0465 208027.21
Oct 05, 2018 456.55 73.77 33679.6935 208437.903
Oct 04, 2018 457.2 73.63 33663.636 209031.84
Oct 03, 2018 464.7 73.345 34083.4215 215946.09
Oct 01, 2018 454.95 72.925 33177.2288 206979.503

27
Sep 28, 2018 452.95 72.51 32843.4045 205163.703
Sep 27, 2018 448.35 72.57 32536.7595 201017.723
Sep 26, 2018 456.6 72.6 33149.16 208483.56
Sep 25, 2018 457.35 72.685 33242.4848 209169.023
Sep 24, 2018 459.1 72.67 33362.797 210772.81
Sep 21, 2018 458.15 72.24 33096.756 209901.423
Sep 20, 2018 438.85 72.015 31603.7828 192589.323
Sep 19, 2018 437.6 72.36 31664.736 191493.76
Sep 18, 2018 442 72.71 32137.82 195364
Sep 17, 2018 429.75 72.54 31174.065 184685.063
Sep 14, 2018 423.95 71.88 30473.526 179733.603
Sep 13, 2018 428.75 72.037 30885.8638 183826.563
Sep 12, 2018 429.75 72.16 31010.76 184685.063
Sep 11, 2018 425.55 72.64 30911.952 181092.803
Sep 10, 2018 426.8 72.455 30923.794 182158.24
Sep 07, 2018 422.6 71.79 30338.454 178590.76
Sep 06, 2018 424.4 71.95 30535.58 180115.36
Sep 05, 2018 419.65 71.755 30111.9858 176106.123
Sep 04, 2018 415.75 71.585 29761.4638 172848.063
Sep 03, 2018 423.85 71.215 30184.4778 179648.823
Aug 31,2018 414 71.005 29396.07 171396
Aug 30,2018 422.25 70.745 29872.0763 178295.063
Aug 29,2018 421.95 70.535 29762.2433 178041.803
Aug 28,2018 423.25 70.1 29669.825 179140.563
Aug 27,2018 418.5 70.165 29364.0525 175142.25
Aug 24,2018 416.25 69.97 29125.0125 173264.063
Aug 23,2018 410.75 70.105 28795.6288 168715.563
Aug 22,2018 412.2 69.87 28800.414 169908.84
Aug 21,2018 416.05 69.86 29065.253 173097.603
Aug 20,2018 412.1 69.82 28772.822 169826.41
Aug 17,2018 407.65 70.1 28576.265 166178.523
Aug 16,2018 405.4 70.09 28414.486 164349.16
Aug 14,2018 416.05 69.96 29106.858 173097.603

28
Aug 13,2018 423.6 70.02 29660.472 179436.96
Aug 10,2018 419.6 68.89 28906.244 176064.16
Aug 09,2018 421.15 68.76 28958.274 177367.323
Aug 08,2018 418 68.66 28699.88 174724
Aug 07,2018 418.1 68.63 28694.203 174807.61
Aug 06,2018 415.5 68.83 28598.865 172640.25
Aug 03,2018 419.05 68.545 28723.7823 175602.903
Aug 02,2018 416.85 68.625 28606.3313 173763.923
Aug 01,2018 414.8 68.35 28351.58 172059.04

Summary Output of Regression Analysis

Regression Statistics
Multiple R 0.822119
R Square 0.67588
Adjusted R
Square 0.669128
Standard Error 0.997112
Observations 50

ANOVA
Significance
df SS MS F F
Regression 1 99.51603 99.51603 100.0934 2.49E-13
Residual 48 47.72311 0.994231
Total 49 147.2391

29
 Standard
Coefficients Error t Stat P-value
1.33E-
Intercept 37.23185 3.410893 10.91557 14
COPPER PRICES 2.49E-
(X) 0.079088 0.007905 10.00467 13

Interpretation:

From the data, we have calculated Karl Pearson’s correlation coefficient between
the Copper prices and US Dollar. After calculating correlation coefficient. It
represents positive relationship between copper prices and US dollar correlation r
= 0.822119.

By looking at the regression analysis, the relationship is positive

(R =0.822119, R2 =0.67588, T= 10.91557, F =100.0934, p=1.33E-14)

From the above data, we can understand that there is a direct relationship between
Copper prices and US Dollar rates to INR. When the Copper prices increases, US
Dollar rates to INR are also increases.

30
Model - 2: Relationship between Copper and BSE SENSEX

To determine the relationship between the Copper and BSE SENSEX. By using
Karl Pearson’s correlation coefficient and regression of the data.

Table 4.3 correlation data of copper and BSE – SENSEX

COPPER BSE -
Date PRICE (X) SENSEX (y) XY x2 y2
Oct 11,
2018 459.25 34001.15 15615028.1 210910.563 1156078201
Oct 10,
2018 458.7 34760.89 15944820.2 210405.69 1208319474
Oct 09,
2018 463.2 34299.47 15887514.5 214554.24 1176453642
Oct 08,
2018 456.1 34474.38 15723764.7 208027.21 1188482876
Oct 05,
2018 456.55 34376.99 15694814.8 208437.903 1181777441
Oct 04,
2018 457.2 35169.16 16079340 209031.84 1236869815
Oct 03,
2018 464.7 35975.63 16717875.3 215946.09 1294245954
Oct 01,
2018 454.95 36526.14 16617567.4 206979.503 1334158903
Sep 28,
2018 452.95 36227.14 16409083.1 205163.703 1312405673
Sep 27,
2018 448.35 36324.17 16285941.6 201017.723 1319445326
Sep 26,
2018 456.6 36542.27 16685200.5 208483.56 1335337497
Sep 25,
2018 457.35 36652.06 16762819.6 209169.023 1343373502
Sep 24,
2018 459.1 36305.02 16667634.7 210772.81 1318054477

31
Sep 21,
2018 458.15 36841.6 16878979 209901.423 1357303491
Sep 20,
2018 438.85 36841.6 16167936.2 192589.323 1357303491
Sep 19,
2018 437.6 37121.22 16244245.9 191493.76 1377984974
Sep 18,
2018 442 37290.67 16482476.1 195364 1390594069
Sep 17,
2018 429.75 37585.51 16152372.9 184685.063 1412670562
Sep 14,
2018 423.95 38090.64 16148526.8 179733.603 1450896856
Sep 13,
2018 428.75 38090.64 16331361.9 183826.563 1450896856
Sep 12,
2018 429.75 37717.96 16209293.3 184685.063 1422644507
Sep 11,
2018 425.55 37413.13 15921157.5 181092.803 1399742296
Sep 10,
2018 426.8 37922.17 16185182.2 182158.24 1438090978
Sep 07,
2018 422.6 38389.82 16223537.9 178590.76 1473778280
Sep 06,
2018 424.4 38242.81 16230248.6 180115.36 1462512517
Sep 05,
2018 419.65 38018.31 15954383.8 176106.123 1445391895
Sep 04,
2018 415.75 38157.92 15864155.2 172848.063 1456026859
Sep 03,
2018 423.85 38312.52 16238761.6 179648.823 1467849189
Aug 31,
2018 414 38645.07 15999059 171396 1493441435
Aug 30,
2018 422.25 38690.1 16336894.7 178295.063 1496923838

32
Aug 29,
2018 421.95 38772.93 16360237.8 178041.803 1503340101
Aug 28,
2018 423.25 38896.63 16462998.6 179140.563 1512947825
Aug 27,
2018 418.5 38694.11 16193485 175142.25 1497234149
Aug 24,
2018 416.25 38251.8 15922311.8 173264.063 1463200203
Aug 23,
2018 410.75 38366.76 15759146.7 168715.563 1472008273
Aug 22,
2018 412.2 38366.76 15814778.5 169908.84 1472008273
Aug 21,
2018 416.05 38285.75 15928786.3 173097.603 1465798653
Aug 20,
2018 412.1 38278.75 15774672.9 169826.41 1465262702
Aug 17,
2018 407.65 37947.88 15469453.3 166178.523 1440041596
Aug 16,
2018 405.4 37663.56 15268807.2 164349.16 1418543752
Aug 14,
2018 416.05 37852 15748324.6 173097.603 1432773904
Aug 13,
2018 423.6 37644.9 15946379.6 179436.96 1417138496
Aug 10,
2018 419.6 37869.23 15889928.9 176064.16 1434078581
Aug 09,
2018 421.15 38024.37 16013963.4 177367.323 1445852714
Aug 08,
2018 418 37887.56 15837000.1 174724 1435467203
Aug 07,
2018 418.1 37665.8 15748071 174807.61 1418712490
Aug 06,
2018 415.5 37691.89 15660980.3 172640.25 1420678572

33
 Aug 03,
2018 419.05 37556.16 15737908.8 175602.903 1410465154
Aug 02,
2018 416.85 37165.16 15492296.9 173763.923 1381249118
Aug 01,
2018 414.8 37521.62 15563968 172059.04 1407871967

Therefore, Karl Pearson’s correlation coefficient ‘r’ = -0.8416

To test the relationship between Copper and BSE SENSEX, it is categorised

Copper is independent variable and BSE SENSEX is dependent variable. Using
regression analysis.

Table 4.4 Regression analysis data of copper and BSE - SENSEX

COPPER BSE -
Date PRICE (X) SENSEX (y) XY x2
Oct 11,
2018 459.25 34001.15 15615028.1 210910.563
Oct 10,
2018 458.7 34760.89 15944820.2 210405.69
Oct 09,
2018 463.2 34299.47 15887514.5 214554.24
Oct 08,
2018 456.1 34474.38 15723764.7 208027.21
Oct 05,
2018 456.55 34376.99 15694814.8 208437.903

34
Oct 04,
2018 457.2 35169.16 16079340 209031.84
Oct 03,
2018 464.7 35975.63 16717875.3 215946.09
Oct 01,
2018 454.95 36526.14 16617567.4 206979.503
Sep 28,
2018 452.95 36227.14 16409083.1 205163.703
Sep 27,
2018 448.35 36324.17 16285941.6 201017.723
Sep 26,
2018 456.6 36542.27 16685200.5 208483.56
Sep 25,
2018 457.35 36652.06 16762819.6 209169.023
Sep 24,
2018 459.1 36305.02 16667634.7 210772.81
Sep 21,
2018 458.15 36841.6 16878979 209901.423
Sep 20,
2018 438.85 36841.6 16167936.2 192589.323
Sep 19,
2018 437.6 37121.22 16244245.9 191493.76
Sep 18,
2018 442 37290.67 16482476.1 195364
Sep 17,
2018 429.75 37585.51 16152372.9 184685.063
Sep 14,
2018 423.95 38090.64 16148526.8 179733.603
Sep 13,
2018 428.75 38090.64 16331361.9 183826.563
Sep 12,
2018 429.75 37717.96 16209293.3 184685.063
Sep 11,
2018 425.55 37413.13 15921157.5 181092.803

35
Sep 10,
2018 426.8 37922.17 16185182.2 182158.24
Sep 07,
2018 422.6 38389.82 16223537.9 178590.76
Sep 06,
2018 424.4 38242.81 16230248.6 180115.36
Sep 05,
2018 419.65 38018.31 15954383.8 176106.123
Sep 04,
2018 415.75 38157.92 15864155.2 172848.063
Sep 03,
2018 423.85 38312.52 16238761.6 179648.823
Aug 31,
2018 414 38645.07 15999059 171396
Aug 30,
2018 422.25 38690.1 16336894.7 178295.063
Aug 29,
2018 421.95 38772.93 16360237.8 178041.803
Aug 28,
2018 423.25 38896.63 16462998.6 179140.563
Aug 27,
2018 418.5 38694.11 16193485 175142.25
Aug 24,
2018 416.25 38251.8 15922311.8 173264.063
Aug 23,
2018 410.75 38366.76 15759146.7 168715.563
Aug 22,
2018 412.2 38366.76 15814778.5 169908.84
Aug 21,
2018 416.05 38285.75 15928786.3 173097.603
Aug 20,
2018 412.1 38278.75 15774672.9 169826.41
Aug 17,
2018 407.65 37947.88 15469453.3 166178.523

36
Aug 16,
2018 405.4 37663.56 15268807.2 164349.16
Aug 14,
2018 416.05 37852 15748324.6 173097.603
Aug 13,
2018 423.6 37644.9 15946379.6 179436.96
Aug 10,
2018 419.6 37869.23 15889928.9 176064.16
Aug 09,
2018 421.15 38024.37 16013963.4 177367.323
Aug 08,
2018 418 37887.56 15837000.1 174724
Aug 07,
2018 418.1 37665.8 15748071 174807.61
Aug 06,
2018 415.5 37691.89 15660980.3 172640.25
Aug 03,
2018 419.05 37556.16 15737908.8 175602.903
Aug 02,
2018 416.85 37165.16 15492296.9 173763.923
Aug 01,
2018 414.8 37521.62 15563968 172059.04

Summery Output of Regression Analysis

Regression Statistics
Multiple R 0.841601
R Square 0.708293
Adjusted R Square 0.702216
Standard Error 691.3818
Observations 50

37
 ANOVA
Significance
df SS MS F F
Regression 1 55711229 55711229 116.5485 1.95E-14
Residual 48 22944422 478008.8
Total 49 78655651

Standard
Coefficients Error t Stat P-value
2.36E-
Intercept 62819.01 2365.061 26.56127 30
COPPER 1.95E-
PRICE (X) -59.1749 5.481302 -10.7958 14

Interpretation:

From the data, we have calculated Karl Pearson’s correlation coefficient between
the Copper prices and BSE SENSEX. After calculating correlation coefficient. It
represents Negative relationship between copper prices and BSE SENSEX
correlation r = -0.8416.

By looking at the regression analysis, the relationship is Negative.

(R =0.841601, R2 =0.708293, T= 26.56127, F =116.5485, p=2.36E-30)

From the above data, we can understand that there is an Inverse relationship
between Copper prices and BSE – SENSEX Index. When the Copper prices
increases, BSE – SENSEX Index point is decreases.

38
Model – 3: Analyses the fluctuations of Copper prices with
comparisons of US Dollar

Table 4.5 Fluctuate of Copper prices with comparisons of US

Dollar

Copper US Dollar
Date Differences Differences
price to INR
Aug 01,
414.8 68.35
2018
Aug 02,
416.85 2.05 68.625 0.275
2018
Aug 03,
419.05 2.2 68.545 -0.08
2018
Aug 06,
415.5 -3.55 68.83 0.285
2018
Aug 07,
418.1 2.6 68.63 -0.2
2018
Aug 08,
418 -0.1 68.66 0.03
2018
Aug 09,
421.15 3.15 68.76 0.1
2018
Aug 10,
419.6 -1.55 68.89 0.13
2018
Aug 13,
423.6 4 70.02 1.13
2018
Aug 14,
416.05 -7.55 69.96 -0.06
2018
Aug 16,
405.4 -10.65 70.09 0.13
2018
Aug 17,
407.65 2.25 70.1 0.01
2018
Aug 20,
412.1 4.45 69.82 -0.28
2018
Aug 21,
416.05 3.95 69.86 0.04
2018
Aug 22,
412.2 -3.85 69.87 0.01
2018
Aug 23,
410.75 -1.45 70.105 0.235
2018
Aug 24,
416.25 5.5 69.97 -0.135
2018
Aug 27,
418.5 2.25 70.165 0.195
2018
Aug 28,
423.25 4.75 70.1 -0.065
2018
Aug 29,
421.95 -1.3 70.535 0.435
2018

39
Aug 30,
422.25 0.3 70.745 0.21
2018
Aug 31,
414 -8.25 71.005 0.26
2018
Sep 03,
423.85 9.85 71.215 0.21
2018
Sep 04,
415.75 -8.1 71.585 0.37
2018
Sep 05,
419.65 3.9 71.755 0.17
2018
Sep 06,
424.4 4.75 71.95 0.195
2018
Sep 07,
422.6 -1.8 71.79 -0.16
2018
Sep 10,
426.8 4.2 72.455 0.665
2018
Sep 11,
425.55 -1.25 72.64 0.185
2018
Sep 12,
429.75 4.2 72.16 -0.48
2018
Sep 13,
428.75 -1 72.037 -0.123
2018
Sep 14,
423.95 -4.8 71.88 -0.157
2018
Sep 17,
429.75 5.8 72.54 0.66
2018
Sep 18,
442 12.25 72.71 0.17
2018
Sep 19,
437.6 -4.4 72.36 -0.35
2018
Sep 20,
438.85 1.25 72.015 -0.345
2018
Sep 21,
458.15 19.3 72.24 0.225
2018
Sep 24,
459.1 0.95 72.67 0.43
2018
Sep 25,
457.35 -1.75 72.685 0.015
2018
Sep 26,
456.6 -0.75 72.6 -0.085
2018
Sep 27,
448.35 -8.25 72.57 -0.03
2018
Sep 28,
452.95 4.6 72.51 -0.06
2018
Oct 01,
454.95 2 72.925 0.415
2018
Oct 03,
464.7 9.75 73.345 0.42
2018
Oct 04,
457.2 -7.5 73.63 0.285
2018

40
 Oct 05,
456.55 -0.65 73.77 0.14
2018
Oct 08,
456.1 -0.45 74.065 0.295
2018
Oct 09,
463.2 7.1 74.34 0.275
2018
Oct 10,
458.7 -4.5 74.25 -0.09
2018
Oct 11,
459.25 0.55 74.05 -0.2
2018

Above data analysed and showed in graphical representation in below

Figure 4.1 shows the movement of copper prices from 01-08-2018

to 11-10-2018.

Copper prices
470
460
450
440
430
420
410
400
390
380
370
Aug 09, 2018
Aug 01, 2018
Aug 03, 2018
Aug 07, 2018

Aug 13, 2018

Aug 16, 2018
Aug 20, 2018
Aug 22, 2018
Aug 24, 2018
Aug 28, 2018
Aug 30, 2018
Sep 03, 2018
Sep 05, 2018
Sep 07, 2018
Sep 11, 2018
Sep 13, 2018
Sep 17, 2018
Sep 19, 2018
Sep 21, 2018
Sep 25, 2018
Sep 27, 2018
Oct 01, 2018
Oct 04, 2018
Oct 08, 2018
Oct 10, 2018

Copper prices

41
 Figure 4.2 shows the movement of US Dollar to INR rates from
01-08-2018 to 11-10-2018.

US Dollar to INR
75
74
73
72
71
70
69
68
67
66
65
Aug 01, 2018
Aug 03, 2018
Aug 07, 2018
Aug 09, 2018
Aug 13, 2018
Aug 16, 2018
Aug 20, 2018
Aug 22, 2018
Aug 24, 2018
Aug 28, 2018
Aug 30, 2018
Sep 03, 2018
Sep 05, 2018
Sep 07, 2018
Sep 11, 2018
Sep 13, 2018
Sep 17, 2018
Sep 19, 2018
Sep 21, 2018
Sep 25, 2018
Sep 27, 2018
Oct 01, 2018
Oct 04, 2018
Oct 08, 2018
Oct 10, 2018
US Dollar to INR

Interpretation:

The above data analyses that, in the first day August 01, 2018. Copper price is ₹
414.8, on the same day the dollar rate is ₹ 68.35. The last day October 11, 2018.
Copper price is ₹459.25 and the dollar rate is ₹ 74.05.

From the above data, we can understand that there is a direct relationship between
Copper prices and US Dollar rates to INR. When the Copper prices increases, US
Dollar rates to INR are also increases.

42
Model – 4: Analyses The fluctuations of Copper prices with
comparisons of BSE – SENSEX Index.

Table 4.6 Fluctuate of Copper prices with comparisons of BSE –

SENSEX Index

Copper
Date Differences BSE - Differences
price SENSEX
Aug 01,
414.8
2018 37521.62
Aug 02,
416.85 2.05
2018 37165.16 -356.46
Aug 03,
419.05 2.2
2018 37556.16 391
Aug 06,
415.5 -3.55
2018 37691.89 135.73
Aug 07,
418.1 2.6
2018 37665.8 -26.09
Aug 08,
418 -0.1
2018 37887.56 221.76
Aug 09,
421.15 3.15
2018 38024.37 136.81
Aug 10,
419.6 -1.55
2018 37869.23 -155.14
Aug 13,
423.6 4
2018 37644.9 -224.33
Aug 14,
416.05 -7.55
2018 37852 207.1
Aug 16,
405.4 -10.65
2018 37663.56 -188.44
Aug 17,
407.65 2.25
2018 37947.88 284.32
Aug 20,
412.1 4.45
2018 38278.75 330.87
Aug 21,
416.05 3.95
2018 38285.75 7
Aug 22,
412.2 -3.85
2018 38366.76 81.01
Aug 23,
410.75 -1.45
2018 38366.76 0
Aug 24,
416.25 5.5
2018 38251.8 -114.96
Aug 27,
418.5 2.25
2018 38694.11 442.31
Aug 28,
423.25 4.75
2018 38896.63 202.52
Aug 29,
421.95 -1.3
2018 38772.93 -123.7

43
Aug 30,
422.25 0.3
2018 38690.1 -82.83
Aug 31,
414 -8.25
2018 38645.07 -45.03
Sep 03,
423.85 9.85
2018 38312.52 -332.55
Sep 04,
415.75 -8.1
2018 38157.92 -154.6
Sep 05,
419.65 3.9
2018 38018.31 -139.61
Sep 06,
424.4 4.75
2018 38242.81 224.5
Sep 07,
422.6 -1.8
2018 38389.82 147.01
Sep 10,
426.8 4.2
2018 37922.17 -467.65
Sep 11,
425.55 -1.25
2018 37413.13 -509.04
Sep 12,
429.75 4.2
2018 37717.96 304.83
Sep 13,
428.75 -1
2018 38090.64 372.68
Sep 14,
423.95 -4.8
2018 38090.64 0
Sep 17,
429.75 5.8
2018 37585.51 -505.13
Sep 18,
442 12.25
2018 37290.67 -294.84
Sep 19,
437.6 -4.4
2018 37121.22 -169.45
Sep 20,
438.85 1.25
2018 36841.6 -279.62
Sep 21,
458.15 19.3
2018 36841.6 0
Sep 24,
459.1 0.95
2018 36305.02 -536.58
Sep 25,
457.35 -1.75
2018 36652.06 347.04
Sep 26,
456.6 -0.75
2018 36542.267 -109.793
Sep 27,
448.35 -8.25
2018 36324.17 -218.097
Sep 28,
452.95 4.6
2018 36227.14 -97.03
Oct 01,
454.95 2
2018 36526.14 299
Oct 03,
464.7 9.75
2018 35975.63 -550.51
Oct 04,
457.2 -7.5
2018 35169.16 -806.47

44
 Oct 05,
456.55 -0.65
2018 34376.99 -792.17
Oct 08,
456.1 -0.45
2018 34474.38 97.39
Oct 09,
463.2 7.1
2018 34299.47 -174.91
Oct 10,
458.7 -4.5
2018 34760.89 461.42
Oct 11,
459.25 0.55
2018 34001.15 -759.74

Above data analysed and showed in graphical representation in below

Figure 4.3 shows the movement of copper prices from 01-08-2018

to 11-10-2018.

Copper price
470
460
450
440
430
420
410
400
390
380
370
Aug 09, 2018
Aug 01, 2018
Aug 03, 2018
Aug 07, 2018

Aug 13, 2018

Aug 16, 2018
Aug 20, 2018
Aug 22, 2018
Aug 24, 2018
Aug 28, 2018
Aug 30, 2018
Sep 03, 2018
Sep 05, 2018
Sep 07, 2018
Sep 11, 2018
Sep 13, 2018
Sep 17, 2018
Sep 19, 2018
Sep 21, 2018
Sep 25, 2018
Sep 27, 2018
Oct 01, 2018
Oct 04, 2018
Oct 08, 2018
Oct 10, 2018

Copper price

45
Figure 4.4 shows the movement of BSE – SENSEX Index from 01-
08-2018 to 11-10-2018.

BSE - SENSEX
40000
39000
38000
37000
36000
35000
34000
33000
32000
31000
Aug 16, 2018

Aug 30, 2018

Sep 13, 2018

Aug 01, 2018
Aug 03, 2018
Aug 07, 2018
Aug 09, 2018
Aug 13, 2018

Aug 20, 2018

Aug 22, 2018
Aug 24, 2018
Aug 28, 2018

Sep 03, 2018

Sep 05, 2018
Sep 07, 2018
Sep 11, 2018

Sep 17, 2018

Sep 19, 2018
Sep 21, 2018
Sep 25, 2018
Sep 27, 2018
Oct 01, 2018
Oct 04, 2018
Oct 08, 2018
Oct 10, 2018
BSE - SENSEX

Interpretation:

The above data analyses that, in the first day August 01, 2018. Copper price is ₹
414.8, on the same day the BSE – SENSEX Index point is 37521.62. The last day
October 11, 2018. Copper price is ₹459.25 and the BSE – SENSEX Index point is
34001.15

From the above data, we can understand that there is an Inverse relationship
between Copper prices and BSE – SENSEX Index. When the Copper prices
increases, BSE – SENSEX Index point is decreases.

46
 CHAPTER – 5

SUMMARY OF FINDINGS, CONCLUSION AND

SUGGESTIONS

47
Findings:

 Copper prices and US dollar rates are showing positive relation. Because
when a commodity price change, it automatically effects on US Dollar.

 Copper prices and BSE Sensex points are showing negative relation.
Because when the Sensex is performing, well the commodity market in
India will go down.

 There are some other factors influencing the copper prices are demand and
supplies in domestic and international markets.

Conclusion:

Metal places a major role in Indian economy and copper commodity contributes a
major part in the gross domestic product of our country. The demand and supply
side of copper market in India is the factor behind the fluctuation on metal price.
Based on study we conclude that copper commodity prices has an influence on
dollar value and BSE – SENSEX. Raise in prices of copper commodities has an
impact on Indian commodity market and financial markets.

48
References
Chathurved, V. (2012, june 29). the hindu. Retrieved from www.thehindu.com:
https://www.thehindu.com/todays-paper/tp-national/tp-kerala/vital-role-for-
commodity-market-in-the-growth-of-economy/article3583472.ece

French, F. a. (1987). Commodity Futures Prices: Some Evidence on Forecast Power.

Journal of Business, 55 - 73.

IMF. (2010). Global prospects and policies. Washington, DC.: International Monitary
Fund.

NCDEX. (2018, March 31). About Us. Retrieved from NCDEX:

https://www.ncdex.com/AboutUs/Profile.aspx

Chatnani, N. N. (2010). Commodity market: Operations, instruments and applications.

New Delhi: Tata McGraw Hill Education Private Limited.

Government of India. (2017 - 18). Annual Report, Ministry of Mines,

https://mines.gov.in/writereaddata/Content/AnnualReport2017-18.pdf

https://www.mcxindia.com

https://in.investing.com/currencies/usd-inr-historical-data

https://in.finance.yahoo.com/quote/%5EBSESN/history?p=%5EBSESN

49