Top 6 Raw Materials Whose Prices Are Going to Rise This Year

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.

1. Aluminium

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.

2. Copper

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.

3. Nickel

Nickel prices have seen a lot of volatility recently. Right now, they are a bit low because there’s a lot of supply. But in the long run, prices will probably go up again because nickel is a key ingredient in EV batteries. However, in the short term, price increases may be constrained by expanded production capacities, particularly in Indonesia. 

The London Metal Exchange (LME) has been seeing stockpiles grow. This means there’s no immediate shortage, but that could change fast if demand spikes.

4. Crude Oil

Oil prices are experiencing volatility, and 2025 won’t be any different. OPEC+ (a group of major oil-producing countries) keeps going back and forth on production limits. And that’s making prices unstable. 

There have been ongoing deliberations within OPEC+ about lifting production caps amid uncertain demand. Political instability in key oil-producing regions adds to price fluctuations. The balance between supply and demand remains delicate, with potential for price increases if production remains constrained.

5. Iron Ore

Iron ore prices are already rising, and 2025 isn’t going to make things easier. Prices are forecasted to extend their increase in 2025, influenced by rising raw material costs and strong demand in the steel sector.

The steel raw material price is influenced by factors like iron ore availability, energy costs, and trade policies. Steel prices in the US have jumped, with hot-rolled coil prices hitting $719 per short ton in early February. And with a 25% tariff on steel imports starting in March, prices will probably keep climbing. 

Manufacturers in industries like construction and automotive are already bracing for higher costs. They are facing challenges in securing steel at stable prices due to market volatility.

6. Natural Gas

Natural gas prices are set to rise in 2025, thanks to increasing demand and some major supply risks. A few important pipeline deals are expiring. And, geopolitical tensions aren’t helping either.

More industrial demand and rising exports are also pushing prices higher. The natural gas market is poised for a boom year, with prices supported by strong demand. So, if you rely on natural gas, expect to pay more.

How to Manage Rising Raw Materials Prices

If raw material prices are going up, you need to be smart. Here are a few ways you can deal with it:

• Monitor Market Trends: Stay updated on raw materials prices. The more you know about price changes, the better decisions you can make.
• Diversify Suppliers: Relying on just one supplier is risky when prices are unpredictable. So, avoid dependency on a single supplier to reduce procurement risks.
• Stock Up When Prices Are Low: If prices are expected to rise, buying ahead of time can save money. Stockpile materials strategically when prices are stable.
• Use Smart Tools: Platforms like Nexizo provide real-time insights into steel raw material price, aluminium raw material price, and other commodities, helping businesses stay ahead of market fluctuations.

Final Thoughts

2025 is shaping up to be an expensive year for raw materials. Whether it’s metals, fuel, or minerals, prices are going up because of supply issues, trade policies, and the world’s shift towards cleaner energy. Businesses need to stay ahead of these changes if they want to avoid sudden cost spikes.

So, what’s the takeaway? If you’re in construction, manufacturing, or any industry that depends on raw materials, don’t wait until prices skyrocket—start planning now.

With rising raw materials prices, businesses must adopt proactive strategies to manage procurement efficiently. Keeping an eye on steel raw material price, aluminium raw material price, and other critical commodities can help companies plan better and reduce cost uncertainties. Stay ahead of market changes with the right insights and smart purchasing strategies!