During the second quarter (2Q) of 2023, prices on the main materials used in connectors decreased 6.9 percent year-over-year (YOY) and increased 2.1 percent sequentially. Four items make up 75 percent of the raw material cost to produce a connector: gold, copper, steel and plastics.
The following chart shows the YOY change in the cost of these materials over the last three years and the first two quarters of 2023.
The following table shows the YOY change in 2Q 2023 for each material. Thermoplastics and steel were the biggest driver of the overall increase as they represent 40.0 percent usage weight of the connector materials. Both materials had mid-teen price drops in the quarter. Copper/brass was also down 3.0 percent. Gold was up 6.6 percent in the quarter. The overall weighted decrease was down 6.5 percent for all materials in the second quarter.
On a quarter-over-quarter basis (1Q 2022 to 2Q 2023), material costs increased 2.1 percent. The weighted total cost for connectors on a sequential basis increased 2.2 percent. Only thermoplastics decreased from 1Q 2023.
We expect connector prices to continue rising in 2023 due to rising material costs, wages and manufacturing overhead costs.