Raw materials are like the backbone of everything. Whether it’s the buildings we live in, the cars we drive, or even the phone you’re reading this on. And when their prices go up, businesses start to feel the heat. That’s why keeping an eye on raw material costs is super important. If a company doesn’t, it might suddenly find itself paying way more than expected.
Keeping track of raw materials prices is essential for businesses to manage procurement efficiently. With global economic shifts, supply chain challenges, and increasing demand from technological advancements and environmental policies, certain materials are expected to see significant price hikes.
Here are the top raw materials that might witness price increases in 2025.
In 2025, among the base metals, aluminium is expected to be the top performer, with analysts forecasting significant price increases. Aluminium prices are expected to go up by around 6.3%. That means it could hit $2,573.50 per metric ton. But why?
It’s because aluminium production needs a ton of electricity. So, the aluminium raw material price is highly dependent on energy costs. And energy costs are going wild. The price increase is also attributed to a projected supply shortfall and heightened demand from sectors focusing on energy transition and decarbonization efforts. Also, China, one of the biggest producers, is dealing with droughts. This means less hydropower, which means more expensive aluminium.
Aluminum prices are also increasing due to the upcoming tariffs and supply chain concerns. The US is adding a 10% tariff on imported aluminium starting March 2025. So that’s going to push prices even higher.
Manufacturers are experiencing difficulties in obtaining current price quotes due to market uncertainties. Companies involved in metal recycling are expected to benefit from these market dynamics.
Prices are expected to rise by about 4.5%, averaging $9,560 per ton. The reason? Everyone’s jumping on the clean energy bandwagon, and copper is a must-have for things like electric grids and batteries.
The demand is bolstered by investments in clean energy technologies and infrastructure, despite challenges such as weak construction activity in China and protectionist trade policies in the U.S. The London Metal Exchange (LME) cash price is forecasted to increase by about 4.5% in 2025.
