Components are made of combined and processed Raw Materials which impact the final cost of the component based on the raw material cost and the ease of sourcing at any given time.
Raw Material Trend Awareness
Users who monitor raw material price trends gain awareness of opportune timing for raw material sourcing in each of the following ways:
- Extrapolating the percent change in raw material prices provides basic awareness of cost impacts on components which include those raw materials.
- Components which have an estimated weighted percentage of raw material input can generate quality assumptions about direct cost projections.
- These cost projections become even more accurate with a known percentage of raw material input per component.
Within the Raw Materials interface (depicted above and listed below), users can review the following:
- Monitoring price trends of raw materials and reviewing the changes in those trends over time.
- Listed Raw Materials or groupings and see specific Raw Material line-item comparisons for recent price and percent changes. Clicking into one of these elements (e.g. Lithium) filters the interface.
- The Raw Material Group table metrics display for the most recent six months and show magnitude of % change each month with color-coded directional indicators.
- Above the time series chart, there is an Average Percent Change in Raw Material Cost for the group selected for view. This summary value will update if you select different raw materials or groups.
- Raw Material Trend Chart is meant to indicate recent quarters by exact Month and Year on the X-Axis and an Indexed % Difference Value on the Y-Axis. This chart always started with the oldest value as a baseline 100 and informs you as to the relative changes in price to that original baseline 100 amount. This will help you to identify major shifts in specific raw material costs over recent quarters.
If we (1) expand the Raw Material Trend to full-size and (2) hover over the June 2023 period, we can see that the first item in our Lithium Group is Lithium Carbonate at $52.85/kg which is a 6.7x increase over our (3) baseline 100 value of $7.85/kg in January 2020. Lithium and Lithium Carbonate prices are currently at record highs due to demand for the raw material in lithium-ion batteries used in portable electronics and electronic vehicles. This large spike is reflected in our Raw Material data.
If you want to isolate the trend interface to just a single raw material, (1) clicking the individual Raw Material (e.g. Lithium Carbonate) in the Step 1 - Choose Raw Material Group section will (2) filter the View - Raw Material Trend to just the individual Raw Material so you can see that price trend on a standalone basis.
To learn more about what Raw Materials and Grouping are available within the Raw Materials feature, please see: Which raw materials have pricing trends?