Raw material
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
Raw material in supply chain
Supply chains typically begin with the acquisition or extraction of raw materials.[3] For example, the European Commission notes that food supply chains commence in the agricultural phase of food production.[4]
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.[5]
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.[6]
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.[7]
Volatility in the raw materials markets can also be driven by
Raw material processing
Ceramic
While
Metallic
Many raw metallic materials used in industrial purposes must first be processed into a usable state. Metallic
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.[13] The top five exporters of Iron ore are Australia, Brazil, South Africa, Canada, and Ukraine.[14] 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.[15]
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.[16] An example of this is the Democratic Republic of the Congo.[citation needed]
See also
- Bulk cargo
- Bulk materials
- Bulk liquids
- Biomaterial
- Commodity
- Conflict resource
- Critical mineral raw materials
- Downcycling
- List of building materials
- Marginal factor cost
- Material passport
- Materials science
- Nature
References
- ^ Christophe Degryse, L'économie en 100 et quelques mots d'actualité, De Boeck, 2005, p. 140.
- ^ European Commission, Raw materials, updated 26 March 2020, accessed 31 December 2020
- ^ "The Supply Chain: From Raw Materials to Order Fulfillment". Investopedia. Retrieved 2023-03-03.
- ^ European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A better functioning food supply chain in Europe, page 2, provisional version published 28 October 2019, accessed 2 February 2023
- ^ Economist Impact and DP World, Trade in Transition 2022: Key Findings, accessed 2 February 2023
- ^ "New Research Forecasts the State of U.S. Supply Chains in 2023". SAP News Center. October 24, 2022. Retrieved March 14, 2023.
- ^ "Read @Kearney: How to navigate a volatile raw materials market". Kearney. Retrieved 2023-03-03.
- ^ "Gauging the Risks of Raw-Material Volatility". BCG Global. 2022-10-07. Retrieved 2023-03-03.
- ISBN 978-0-8018-8360-6. p. 21.
- ^ "Materials processing". Retrieved 8 February 2018.
- PMID 16592930.
- ^ Understanding materials science, p. 125, Rolf E. Hummel, Springer, 2004
- ^ "Mineral Information Institute - IRON ORE". 2006-04-17. Archived from the original on 2006-04-17. Retrieved 2019-03-17.
- ^ Workman, Daniel (2018-12-08). "Iron Ore Exports by Country". World's Top Exports. Retrieved 2019-03-17.
- ^ "Hurstwic: Iron Production in the Viking Age". www.hurstwic.org. Retrieved 2019-03-17.
- ^ Bernard Tchibambelela, Le commerce mondial de la faim: stratégie de rupture positive au Congo-Brazzaville, Éditions L'Harmattan, 2009, p. 183.
Further reading
- Global North a superabundance of "stuff," at an unsustainable cost to the world's environmentand reserves of raw materials.
- Karl Marx, Capital, Vol. 1, Part III, Chap. 7.