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© pichetw dreamstime.com_hand pushing information button on touch screen Analysis | December 01, 2015

Raw materials prices show significant decrease

The Passive Component Raw Material Index showed a significant decrease in pricing in August 2015 of 10.5% on a month-to-month basis following another equally significant price reduction in July of 9.3%, writes Dennis Zogbi for TTI's MarketEye.
While the lower raw materials pricing bodes well for profitability for passive component manufacturers, it is also a testament to a weak global economy. The raw materials consumed in passive electronic components are also consumed in a myriad of other end-markets and are therefore an indicator of the health of the global economy as a whole, he notes.

The decrease in pricing was evident in all commodities tracked by him, which is not an encouraging sign in the market. This drop in price is proportional to a drop in demand.

Base metal material prices decreased by 10.6 percent in August following a 10.7 percent decrease in July. Nickel prices especially took a huge dip; and copper, aluminium and zinc also dropped significantly in price for the month. Precious and rare metal prices also decreased by 8.5 percent in August 2015, following a 6.8 percent price decrease in July 2015 (measured on a month-to-month basis).

Prices for palladium dropped sharply. Ruthenium prices were also down. Tantalite prices remained unchanged, and silver prices dipped slightly in August 2015.

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