Raw Materials Definition
Raw materials are materials or substances used in the primary production or manufacturing of goods. Raw materials can be natural or synthetic. They can be living, like trees and animals, or non-living, like water and minerals. They can be renewable, like wood, or non-renewable, like fossil fuels.
The term “raw material” is most commonly used in the context of manufactured goods. For example, the raw materials for a car might include iron ore for the steel frame, rubber for the tires, plastic for the body panels, and glass for the windows.
In contrast to finished goods, which are complete and ready for use, raw materials are often in a semi-finished state. For example, lumber is a raw material that can be used to make furniture, but it must first be cut and shaped into the desired pieces. Similarly, iron ore must be smelted and purified into steel before it can be used to build cars or appliances.
While some raw materials are readily available (like air), others must be extracted from the earth through mining (like coal) or harvesting (like timber). The cost of raw materials can fluctuate depending on market conditions, which can impact the cost of finished goods