raw material

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      A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials that are feedstock for future finished products. As feedstock, the term connotes these materials are bottleneck assets and are required to produce other products.
      The term raw material denotes materials in unprocessed or minimally processed states such as raw latex, crude oil, cotton, coal, raw biomass, iron ore, plastic, air, logs, and water. The term secondary raw material denotes waste material which has been recycled and injected back into use as productive material.


      Raw material in supply chain


      Supply chains typically begin with the acquisition or extraction of raw materials. For example, the European Commission notes that food supply chains commence in the agricultural phase of food production.
      A 2022 report on changes affecting international trade noted that improving sourcing of raw materials has become one of the main objectives of companies reconfiguring their supply chains.
      In a 2022 survey conducted by SAP, wherein 400 US-based leaders in logistics and supply chain were interviewed, 44% of respondents cited a lack of raw materials as a reason for their supply chain issues. Forecasting for 2023, 50% of respondents expect a reduced availability of raw materials in the US to drive supply chain disruptions.


      = Raw materials markets

      =
      Raw materials markets are affected by consumer behavior, supply chain uncertainty, manufacturing disruptions, and regulations, amongst other factors. This results in volatile raw materials markets that are difficult to optimize and manage. Companies can struggle when faced with raw material volatility due to a lack of understanding of market demands, poor or no visibility into the indirect supply chain, and the time lag of raw materials price changes.
      Volatility in the raw materials markets can also be driven by natural disasters and geopolitcal conflict. The COVID-19 pandemic disrupted the steel industry, and once demand rebounded, prices increased 250% in the US. The Russian invasion of Ukraine caused the price of natural gas to increase by 50% in 2022.


      Raw material processing




      = Ceramic

      =
      While pottery originated in many different points around the world, it is certain that it was brought to light mostly through the Neolithic Revolution. That is important because it was a way for the first agrarians to store and carry a surplus of supplies. While most jars and pots were fire-clay ceramics, Neolithic communities also created kilns that were able to fire such materials to remove most of the water to create very stable and hard materials. Without the presence of clay on the riverbanks of the Tigris and Euphrates in the Fertile Crescent, such kilns would have been impossible for people in the region to have produced. Using these kilns, the process of metallurgy was possible once the Bronze and Iron Ages came upon the people that lived there.


      = Metallic

      =
      Many raw metallic materials used in industrial purposes must first be processed into a usable state. Metallic ores are first processed through a combination of crushing, roasting, magnetic separation, flotation, and leaching to make them suitable for use in a foundry. Foundries then smelt the ore into usable metal that may be alloyed with other materials to improve certain properties. One metallic raw material that is commonly found across the world is iron, and combined with nickel, this material makes up over 35% of the material in the Earth's inner and outer core. The iron that was initially used as early as 4000 BC was called meteoric iron and was found on the surface of the Earth. This type of iron came from the meteorites that struck the Earth before humans appeared, and was in very limited supply. This type is unlike most of the iron in the Earth, as the iron in the Earth was much deeper than the humans of that time period were able to excavate. The nickel content of the meteoric iron made it not necessary to be heated up, and instead, it was hammered and shaped into tools and weapons.


      = Iron ore

      =

      Iron ore can be found in a multitude of forms and sources. The primary forms of iron ore today are Hematite and Magnetite. While iron ore can be found throughout the world, only the deposits in the order of millions of tonnes are processed for industrial purposes. The top five exporters of Iron ore are Australia, Brazil, South Africa, Canada, and Ukraine. One of the first sources of iron ore is bog iron. Bog iron takes the form of pea-sized nodules that are created under peat bogs at the base of mountains.


      Conflicts of raw materials


      Places with plentiful raw materials and little economic development often show a phenomenon known as "Dutch disease" or the "resource curse", which occurs when the economy of a country is mainly based upon its exports because of its method of governance. An example of this is the Democratic Republic of the Congo.


      See also




      References




      Further reading


      Elizabeth Kolbert, "Needful Things: The raw materials for the world we've built come at a cost" (largely based on Ed Conway, Material World: The Six Raw Materials That Shape Modern Civilization, Knopf, 2023; Vince Beiser, The World in a Grain; and Chip Colwell, So Much Stuff: How Humans Discovered Tools, Invented Meaning, and Made More of Everything, Chicago), The New Yorker, 30 October 2023, pp. 20–23. Kolbert mainly discusses the importance to modern civilization, and the finite sources of, six raw materials: high-purity quartz (needed to produce silicon chips), sand, iron, copper, petroleum (which Conway lumps together with another fossil fuel, natural gas), and lithium. Kolbert summarizes archeologist Colwell's review of the evolution of technology, which has ended up giving the Global North a superabundance of "stuff," at an unsustainable cost to the world's environment and reserves of raw materials.
      Karl Marx, Capital, Vol. 1, Part III, Chap. 7.

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    Raw Materials - Canada Commons

    Feb 11, 2025 · The term raw material denotes materials in unprocessed or minimally processed states; e.g., raw latex, crude oil, cotton, coal, raw biomass, iron ore, air, logs, water, or "any product of agriculture, forestry, fishing or mineral in its natural form or which has undergone the transformation required to …

    Raw Materials Definition & Example - InvestingAnswers

    Aug 12, 2020 · Raw materials determine the quality and cost of producing an item. Many raw materials are commodities that trade on the futures market . For many companies, acquiring raw materials at a good price makes the difference between having a profitable year and having an unprofitable year.

    Inventory | Examples & Definition - InvestingAnswers

    May 17, 2021 · 1. Raw Material Inventory. The raw material inventory is at the beginning of the supply chain. These are the materials the products will be created from. For example, steel and rubber are used to produce vehicles while textiles and wood are the raw material inventory used to produce furniture. 2. Inventory Management

    Work in Process | WIP - InvestingAnswers

    Jan 11, 2021 · Work in process is a component of inventory, a current asset. Other components of inventory are raw material and finished goods. Most companies list work in process clearly on the balance sheet. Look down the left side of the balance sheet: WIP is usually listed with raw materials and finished goods, above the subtotal for total inventory.

    Pulp and Paper Industry - Canada Commons

    Nov 1, 2024 · The pulp and paper industry comprises companies that use wood as raw material and produce pulp, paper, paperboard and other cellulose-based products. The pulp is fed to a paper machine where it is formed as a paper web and the water is removed from it by pressing and drying. Pressing the sheet removes the water by force.

    Money Definition & Example - InvestingAnswers

    Mar 16, 2021 · That is, the paper or metal used to create the money is not worth very much in terms of its value as a raw material. Most paper money is fiat money, and its value comes from what it represents rather than what it is. Before 1971, the U.S. dollar was not fiat money -- it was backed by a corresponding amount of gold held with the Federal Reserve.

    Materials Management - Canada Commons

    Dec 19, 2024 · Materials management is also responsible for determining the amount of material to be deployed at each stocking location across the supply chain, establishing material replenishment plans, determining inventory levels to hold for each type of inventory (raw material, WIP, finished goods), and communicating information regarding material needs ...

    Timber | Canada Commons

    Jan 21, 2025 · Lumber is mainly used for structural purposes but has many other uses as well. There are two main types of lumber. It may be supplied either rough-sawn, or surfaced on one or more of its faces. Besides pulpwood, rough lumber is the raw material for furniture-making and other items requiring additional cutting and shaping.

    BDI -- Baltic Dry Index -- Definition & Example - InvestingAnswers

    Nov 11, 2020 · Since the BDI consists primarily of raw material inputs to intermediate or finished goods, it is said to accurately indicate future economic growth. Additionally, since the supply of shipping is highly inelastic , i.e., it takes a significant amount of time to produce more ships, small fluctuations in prices are easily observed in the index.

    Paper Money Definition & Example - InvestingAnswers

    Oct 1, 2019 · That is, the paper used to create the money is not worth very much in terms of its value as a raw material. Most paper money is fiat money , and its value comes from what it represents rather than what it is.