What rising raw material prices mean for electronics

 On the London Metal Exchange (LME), copper reached record territory in early January 2026, pushing above US$13,300 per tonne. That’s more than 20 per cent higher than the late 2025 average as stock tightness and strong industrial demand combined.

That matters because copper isn’t just a metal you read about in commodity news. It’s used extensively in printed circuit boards, internal connectors and wiring, as well as across many power and signal paths in electronics. As a result, movements in copper pricing directly influence the cost of the boards and assemblies engineers design and build.

Precious metals are also impacting pricing dynamics. Gold recently surged above US$5,000 per ounce, reaching a series of record highs in the first few weeks of 2026 amid market volatility and safe-haven demand. While gold isn’t in every bill of materials, it’s used in contact plating and specialist components where performance meets reliability.

Likewise, aluminium has traded firmly above $3,000 per tonne on global benchmarks and is forecast to remain well supported given current market dynamics. Even when commodity analysts suggest prices might ease later in the year, the near-term story is volatility, which introduces risk.

When inputs move

Engineers regularly buy copper foil, laminates and boards priced off copper’s movement. Over 2025 and into 2026, manufacturers of copper-clad laminate — the base material for almost all FR-4 boards — began issuing public price adjustments directly linked to rising raw materials.

Some supplier notices describe increases of up to 30 per cent across all thicknesses of copper-clad laminate and prepreg, driven by higher copper prices, glass cloth costs and processing expenses.

This is the kind of upstream movement that doesn’t stay upstream. It filters through every layer of a PCB quotation, especially in multi-layer designs where copper and prepreg content is higher.

The wider passive component landscape tells a similar story. Industry analysis shows price increases across capacitors, inductors, ferrite beads and related passives. These range from single digit to double-digit percentages for early 2026 deliveries, often citing metals and process cost inflation among the drivers.

 This doesn’t mean you should panic buy every part in your current bill of materials (BOM). However, it does mean that the old “wait-and-see” strategy is getting riskier, particularly if you’re dependent on a single branded source for key sections of your design.

Alternative sourcing

Second sourcing is moving back into focus, not as a cost-cutting exercise but as a form of risk management. Pin-for-pin alternatives, for instance, allow engineering teams to maintain electrical and mechanical compatibility while reducing dependence on individual manufacturers, whose pricing or lead times may be more exposed to raw material volatility.

This approach is particularly effective for widely used regulators, discretes, interface devices and passives, where functional equivalence is well understood and validation cycles are manageable. As volatility increases, having approved alternatives already mapped can significantly reduce disruption when prices shift or allocations appear.

When suppliers combine local stock with extended inventory and effective cross-reference tools, response times improve. During a time of uncertain input costs, that flexibility is as valuable as unit price, provided performance remains consistent.

Prices might ease at some point, but it’s difficult to predict when. Volatility isn’t going away, and when raw material costs feed into electronics pricing, it’s the teams that design and source with flexibility in mind that are better positioned to respond when conditions change.

Chris Withers is sales director at Zel Components