Q4 2025 Raw Material Costs: What Hardware Manufacturers Should Plan For Now

Which Material Costs Are Shaping 2026 Margins?

As hardware companies move into late 2025 planning cycles, procurement teams are managing cost fluctuations across multiple material categories. Input prices for copper, semiconductors, lithium, and other components continue to shift, either due to supply constraints or market adjustments.

This update focuses on six materials affecting electronics and energy-related hardware: copper, semiconductors, lithium, steel, aluminium, and plastics. It outlines current China-based prices and identifies areas of risk, stability, or change relevant to bill of materials (BOM) planning and 2026 contract structuring.

Quarterly Price Context: 2025 Material Cost Trends (China Market Reference)

The table below summarises quarterly price movements across key materials to show how Q4 sits relative to earlier quarters.

Material	Q1 2025 (Avg.)	Q2 2025 (Avg.)	Q3 2025 (Avg.)	Q4 2025 (Current)	Key Trend Rationale
Copper	~USD $9,300/t	~USD $9,500/t	~USD $9,100/t	~USD $9,200–9,400/t	Mid‑year fluctuation, now rising due to Indonesia mine closure and supply constraints
Lithium	~USD $9,200/t	~USD $7,500/t (Low)	~USD $11,000/t	~USD $10,857/t	Q1–Q2 surplus drove decline; Q3 volatility and partial rebound; Q4 stabilisation
Semiconductors (DRAM/NAND)	Slight rise (~+5%)	Moderate rise (~+10%)	Continued rise (~+10%)	Up ~15–20% QoQ	Capacity absorbed by AI and data centre demand
Aluminium	~USD $2,550/t	~USD $2,650/t	~USD $2,800/t (Peak)	~USD $2,500–2,550/t	Peaked in Q3 due to energy costs; slight decline in Q4
Steel (HRC)	~CNY 5,750/t	~CNY 5,750/t	~CNY 5,800/t	CNY 5,800–5,900/t	Stable throughout the year
Plastics/Resins	Stable	Stable	Stable	Stable	Driven mainly by long-term crude oil trends

This quarterly view highlights the core movements supporting Q4 sourcing decisions: copper and semiconductors continue upward pressure, lithium has stabilised after significant volatility, aluminium is trending down slightly, and steel and plastics remain steady.

The Q4 Price Drivers: Which Core Materials Are Increasing (and Why)?

Cost pressure on margins is primarily driven by materials facing acute supply-side events and shifts in demand allocation.

Copper: Supply Reduction Is Driving Q4 Pricing Pressure

Copper pricing in China has increased following the suspension of a major mine in Indonesia. This has reduced global supply and pushed spot pricing upward.

Copper is used in PCBs, connectors, power systems, and internal cabling. These increases are directly influencing BOM costs and supplier quotations across categories.

• Current Price: CNY 67,000–68,500/tonne (~$9,200–9,400/tonne USD)

• Action:

  • Assess exposure across copper-heavy assemblies

  • Review alternative materials or lower-copper design options

  • Confirm updated lead times with primary suppliers

Semiconductors: DRAM and NAND Costs Affected by Data Centre Demand

Memory pricing continues to rise in Q4. Increases of 15–20% are being reported for DRAM and NAND. This is linked to demand from GPU-intensive systems and AI infrastructure, rather than consumer or mobile sectors.

For teams using memory in embedded systems, storage modules, and sensor-based products, allocation and availability may affect both cost and timing.

• Change in Q4: DRAM/NAND up 15–20%

• Action:

  • Prioritise procurement for large-capacity memory

  • Add buffer inventory for longer-lead SKUs

  • Monitor allocation notices from high-volume memory suppliers

Lithium: Price Stability After Q1 2025 Decline

After significant declines in Q1, lithium carbonate pricing has stabilised. The earlier drop was due to oversupply following EV demand levelling out. Since mid-year, Chinese suppliers have slowed production, leading to a more stable pricing environment.

This is relevant for energy storage, battery-powered systems, and EV-related hardware.

• Battery-grade lithium carbonate (China): CNY 84,350 (~$10,857/tonne)

• Action:

  • Evaluate the benefit of locking pricing before Q1 2026

  • Track production updates from key lithium producers in China

  • Adjust BOM projections to reflect current spot values

Steel: Costs Are Flat but Still Carry Logistics Exposure

Steel prices in China remain unchanged through Q4. Input costs for hot-rolled coil have not moved significantly, but the overall cost structure can still be influenced by transportation fees, import/export taxes, and local premiums.

Steel is commonly used in mounting structures, enclosures, and support frames.

• Price: CNY 5,800–5,900/tonne (~$800–815/short ton USD)

• Action:

  • Review contract terms for logistics surcharges

  • Reassess regional sourcing options for better lead times or landed costs

Aluminium: Slight Softening, but Freight Costs Still Apply

Aluminium mill shape pricing has eased slightly since its mid-year peak. Despite this movement, costs remain higher than 2023 levels due to energy input costs and ongoing freight considerations.

Aluminium is used in structural parts, heat sinks, casings, and thermal modules.

• Price: CNY 18,200–18,700/tonne

• Action:

  • Confirm supplier spot pricing reflects the current market

  • Compare regional shipping terms for potential savings

Plastics and Resins: Price Stability With Volatility Risk

Plastic and polymer pricing is relatively stable in Q4, but remains sensitive to global energy prices. Resins and adhesives continue to be influenced by oil-based feedstocks.

This affects casings, cable insulation, adhesives, and overmolding compounds.

• Price Range: CNY 7,800–9,200/tonne (material-dependent)

• Action:

  • Track polymer index prices monthly

  • Review second-source readiness for key resins and adhesives

  • Include formulation alternates where applicable

Q4 Procurement Action Checklist

Task	Material(s) Affected	Purpose
Lock short-term pricing	Aluminium, Lithium	Secure Q4 rates ahead of Q1 2026 fluctuations
Review design dependencies	Copper	Reduce cost impact and manage sourcing risk
Adjust inventory forecasts	DRAM, NAND	Account for limited availability
Monitor freight-related fees	Steel, Aluminium	Reduce landed cost uncertainty
Validate second sourcing	Plastics, Resins	Protect supply continuity

Sourcing Workbook Available

We’ve compiled these Q4 trends into a reference workbook for hardware sourcing teams. It includes:

• Current price benchmarks

• Editable BOM cost tracking templates

• Supplier evaluation prompts

• Planning checklists for 2026 procurement

📄 Request access to the workbook by contacting us here or through your Ardencraft representative.