Raw Material Market Fluctuation Monitoring Tools Predict Cost Changes

Small importers, e-commerce sellers, and wholesalers need a simple way to see where input costs are heading. Raw Material Market Fluctuation Monitoring: Tools for Predicting Cost Changes helps you track signals before prices move, so you can protect margins, plan inventory, and negotiate with confidence. We will outline practical methods used by sourcing teams in China and abroad, including commodity price forecasting, predictive analytics, and procurement dashboards.

In this guide, you will learn which price indices to watch, how to build actionable alerts, and how to link forecasts to PO timing, supplier terms, and hedging options. We will also show real examples, step-by-step checklists, and quick wins for SMEs. By the end, you’ll know how to apply Raw Material Market Fluctuation Monitoring: Tools for Predicting Cost Changes.

Introduction to Raw Material Market Fluctuation Monitoring

What Is Raw Material Market Fluctuation?

Raw material market fluctuation is the change in prices of raw materials like metals, plastics, food grains, oil, and chemicals over time. These price changes can be sudden or gradual. They may go up or down in response to world events, seasonal trends, or changes in demand and supply. Companies that use raw materials must always be aware of these changes because they impact costs and profits. Fluctuations can happen in any market, whether it is steel, copper, wheat, rubber, or crude oil.

Monitoring raw material market fluctuation means paying close attention to the market and tracking price trends. This helps businesses react faster to changes. In recent years, with more global connections and fast-moving economies, these price changes have become more common and less predictable.

Why Monitoring Fluctuations Matters for SMEs and E-Commerce

SMEs and e-commerce sellers need to monitor raw material market fluctuations because their business costs often depend directly on raw material prices. For small and medium enterprises (SMEs), even a small increase in material costs can reduce profit margins. For e-commerce businesses, changes in prices might mean adjusting product prices, or even changing suppliers.

If an SME doesn’t notice a price hike in time, they may end up buying materials at higher prices, hurting their bottom line. For e-commerce sellers, missing these trends can make their items more expensive than the competition, leading to fewer sales. Staying alert to market changes can help businesses buy at the right time, negotiate better deals, and avoid sudden cost increases. It also helps with planning and reducing risks.

Proactive monitoring allows businesses to protect themselves, set better pricing strategies, and keep customers happy, even during times of high volatility. It is now almost essential for staying competitive.

Typical Causes of Raw Material Price Volatility

Raw material price volatility is caused by several factors. One of the most common reasons is supply and demand imbalance. For example, if demand goes up or supply goes down, prices rise. Other reasons include geopolitical tensions, such as wars or trade disputes, which can block supply routes and create uncertainty.

Natural disasters can also play a role. Floods, droughts, earthquakes, or even pandemics can stop production or transport, reducing supply and pushing prices higher. Government regulations, taxes, or tariffs sometimes change overnight, impacting costs.

Global economic shifts, like inflation or currency swings, also affect raw material prices. Sometimes, speculation and trading on commodity exchanges cause quick, unpredictable price changes. Seasonal changes, such as harvest times for crops or winter demand for energy, can make prices move up and down too.

All of these causes make it crucial for businesses to monitor the raw material market and understand the reasons behind every fluctuation. Knowing the reasons can help in predicting and preparing for future changes.

Key Drivers of Raw Material Price Changes

Global Economic and Geopolitical Factors

Global economic and geopolitical factors are major drivers of raw material price changes. When the global economy grows, so does demand for raw materials, pushing prices higher. However, economic slowdowns can make prices fall quickly. In 2024 and 2025, experts noticed that inflation, shifts in currency values, and changes in interest rates all have a big effect on what raw materials cost. For example, if a country’s currency weakens, importing raw materials becomes more expensive.

Geopolitical events play a huge part as well. Trade wars, sanctions, and political conflicts can disrupt global supply chains or limit access to key commodities. For example, if two countries that produce a lot of copper or oil are in conflict, prices can jump for everyone. The recent tensions between major economies, and even localized conflicts, have affected supply routes and triggered fears of shortages or rising costs. When a country tightens export controls or introduces tariffs on raw materials, this can also lead to rapid price changes everywhere.

So, when watching the market, always pay attention to news about economic policy changes, political instability, and global trade agreements. These are often the first signs that raw material prices could be about to shift.

Supply Chain Disruptions and Market Uncertainties

Supply chain disruptions and market uncertainties have continued to shape raw material price volatility in 2024. Sudden problems, like factory fires, labor strikes, transport bottlenecks, and cyber-attacks, have become frequent and can halt or slow the flow of materials to manufacturers. Even a short break in the chain — such as a container ship stuck at a port, or a severe weather event closing a railway — can quickly lead to shortages and spikes in prices.

Recently, global supply chains have also faced more unexpected shocks, like extreme weather, pandemics, and shifting consumer demand. When this happens, reliable sources dry up, making materials scarce and more expensive. According to supply chain experts, businesses are struggling with delayed shipments, lack of inventory, and difficulty predicting when and where the next problem will happen.

More interconnected markets mean that a local problem can now become a global price issue in just days. For example, if one country delays exports of a key ingredient for batteries, electronics industries worldwide can feel the effect.

Uncertainty itself can push prices up. Buyers, fearing further shortages, might order more than they really need, which creates “artificial” scarcity. Monitoring logistics, transport, and supply chain news is crucial if you want to react quickly to market changes.

Environmental and Regulatory Influences

Environmental and regulatory influences play an increasingly important role in raw material price changes. New sustainability rules, climate initiatives, and stricter environmental standards all raise the cost and complexity of sourcing and using many materials.

For example, as more governments push for carbon-neutrality and cleaner production, many industries have to adapt by using more recycled materials or switching to greener options. This shift may reduce reliance on some raw materials but often increases demand (and prices) for others, like rare earth elements critical for clean tech.

Extreme weather events like hurricanes, droughts, or wildfires can destroy crops, mine sites, or transport routes. In 2024, climate issues like El Niño caused serious price swings for food-related materials and some minerals.

Another key driver is regulation: If a government introduces new rules about how and where materials can be mined, or limits environmental impact, it can restrict supply and push up costs. Businesses may also need to spend more money to meet these legal requirements, which makes the overall price of raw material higher.

Staying updated with new environmental laws, global climate agreements, and major weather risks helps businesses plan for potential price volatility in their raw materials.

Effects of Raw Material Price Fluctuation

Impact on Product Cost and Profit Margins

Impact on product cost and profit margins is one of the most direct effects of raw material price fluctuation. When prices for key raw materials rise, the cost to manufacture products also increases. This forces businesses to make tough choices. They can either pass these added costs to customers, which might make their products less competitive, or absorb the increases themselves. Absorbing these costs often leads to shrinking profit margins, which can hurt a company’s bottom line.

For instance, if a company that makes aluminum cans faces a sudden spike in aluminum prices, the cost to produce each can rises instantly. Even small changes in raw material costs can quickly add up, especially in industries where profit margins are already thin. Over time, these fluctuations can make it difficult to set prices, plan budgets, or forecast profits with confidence.

Industry Examples: Automotive, Electronics, Food & Beverage

Industry examples show how raw material price fluctuation affects different sectors in unique ways. In the automotive industry, steel and rubber are crucial materials. If steel prices increase due to global events or supply chain issues, the cost to build each vehicle goes up. This may lead to higher car prices for consumers or reduced profits for automakers.

In the electronics sector, copper and rare earth elements are essential for making circuit boards and batteries. When copper prices surge, companies that produce smartphones or computers face higher production expenses. This can delay new product launches or lead to higher retail prices.

The food and beverage industry is often vulnerable to agricultural commodity swings. For example, a jump in wheat or sugar prices directly impacts the cost to produce bread, pastries, or soft drinks. In some cases, companies might use lower quality ingredients or reduce package sizes to keep costs under control.

Risks for Small Businesses and Importers

Risks for small businesses and importers are significant when it comes to raw material price fluctuation. Unlike large corporations, small businesses usually lack the financial power to absorb sudden increases in costs. They may also be less able to negotiate with suppliers or secure long-term contracts to lock in prices.

For importers, volatility in raw material prices can combine with currency exchange fluctuations or changes in tariffs, making landed costs unpredictable. This uncertainty can lead to tight cash flow, lost customers, or even business closures if margins shrink too far.

Small businesses might also struggle to pass rising costs to customers, especially if their market is sensitive to price changes. As a result, a spike in raw materials doesn’t just threaten profits—it can endanger the entire operation. Monitoring prices closely and adopting risk management strategies becomes critical for business survival.

Tools and Technologies for Monitoring Market Fluctuations

Price Index Platforms (e.g., LME, ICIS)

Price index platforms are essential for tracking raw material prices in global markets. Popular platforms like the London Metal Exchange (LME) and Independent Commodity Intelligence Services (ICIS) offer real-time and historical price data for metals, chemicals, plastics, and energy. Businesses use these platforms to monitor official prices, analyze trends, and benchmark their purchase costs. LME provides daily prices for metals like aluminum, copper, and nickel, while ICIS covers chemicals, oil, and plastics. By following these indices, companies can quickly detect any price changes and make informed buying decisions. Fast access to this data is crucial for anyone dealing in commodities.

Real-Time Price Tracking Tools

Real-time price tracking tools help businesses keep an eye on volatile raw material markets. These tools use APIs and data feeds to deliver instant updates about price movements. They often come with dashboards, notifications, and customization options. Manufacturers and e-commerce sellers can set up alerts for specific thresholds, so they are notified when prices hit a particular level. Some of the most used tools are MetalMiner, Fastmarkets, and Bloomberg Commodity Price Tracker. These tools save time and allow businesses to stay ahead of sudden market changes.

AI and Predictive Analytics Software

AI and predictive analytics software take market monitoring to a higher level. These technologies can analyze huge amounts of historical and current pricing data. They use machine learning algorithms to recognize patterns and predict where prices might go next. With AI, companies can move from responding to market changes to preparing for them in advance, reducing risks and securing better deals.

Machine Learning and Price Forecasting

Machine learning has become a powerful tool for price forecasting. By learning from past price movements, global events, and seasonal trends, machine learning models can generate forecasts for various raw materials. These predictions can help businesses plan their sourcing activities, adjust budgets, and even negotiate contracts. For example, TensorFlow and Scikit-learn are popular platforms used by companies for building in-house forecasting tools.

Deep Learning Models in Cost Prediction

Deep learning models take forecasting a step further. They use neural networks to process complex datasets, including supply chain disruptions, weather impacts, and economic signals. Deep learning excels when data is noisy or relationships are hard to spot. It can help businesses with cost prediction that considers multiple factors at once. These advanced models can improve the accuracy of price forecasts and support smarter purchasing decisions.

ERP and Cost Management Software Integration

ERP (Enterprise Resource Planning) and cost management software help connect price data with business operations. When these systems are integrated with market tracking tools, raw material prices are automatically updated in procurement and accounting modules. This helps purchasing teams see the current cost impact immediately. Programs like SAP, Oracle, and Microsoft Dynamics offer modules for price management, budgeting, and reporting. Integration means less manual work and fewer errors, making sure pricing information is always fresh and reliable.

Blockchain Applications in Sourcing Transparency

Blockchain technology is making waves for improving transparency in raw material sourcing. With blockchain, every transaction and price change can be recorded securely and shared across the supply chain. This can help verify the origin of raw materials and trace price changes back to reliable sources. For buyers, blockchain reduces the risk of fraud and ensures the information is authentic. It is especially useful for businesses that need to prove ethical sourcing or comply with tough regulations.

In today’s fast-changing world, keeping up with market fluctuations is easier and more reliable thanks to these advanced tools and technologies. They support companies of all sizes to act quickly, control costs, and turn challenges into opportunities.

Building a Proactive Strategy

Data Sources and Market Intelligence

Data sources and market intelligence are crucial for staying ahead of raw material market fluctuations. Companies should regularly monitor multiple data sources to gather comprehensive insights. This includes official commodity exchanges, industry news websites, economic reports, and governmental statistics. By analyzing data from these channels, businesses can spot market trends early. Effective use of market intelligence involves comparing different data points, identifying shifting demands, and tracking production or supply changes worldwide. Having a dedicated team or reliable tool for market research improves decision-making and helps avoid surprises in pricing.

Setting Up Alerts and Automated Reporting

Setting up alerts and automated reporting transforms how businesses react to changing raw material prices. By using digital platforms or specialized apps, you can receive instant notifications when significant price changes occur. Automated reporting tools can send daily or weekly summaries of market trends straight to your inbox. This helps businesses move quickly and adjust their procurement or pricing strategies. Setting clear alert thresholds for when prices move beyond a certain percentage ensures you act before there’s any impact on costs or profits. Automated reports also save time by compiling relevant data, allowing decision-makers to focus on analysis instead of manual data collection.

Benchmarking and Historical Price Analysis

Benchmarking and historical price analysis provide a powerful way to understand market behavior and set realistic expectations. Benchmarking involves comparing your raw material costs or sourcing terms with industry averages or leading competitors. This shows if you are paying too much or getting a good deal. Historical price analysis looks at how raw material costs have changed over months or years. Patterns like seasonal spikes or long-term trends become clear with this approach. By combining both techniques, businesses can plan better and set strategic purchasing budgets. This preparation is especially helpful for small businesses trying to avoid sudden cost shocks.

Examples: Sourcing Platforms for SMEs

Examples of sourcing platforms for SMEs highlight practical solutions for managing raw material market changes. Digital marketplaces like Alibaba, IndiaMART, and Global Sources allow small businesses to compare prices across hundreds of suppliers. Some platforms offer real-time pricing, quality assurance, and transparent supplier ratings. Others, such as Thomasnet or Tradekey, specialize in connecting buyers to certified domestic and international sources. Advanced features on these platforms may include built-in analytics, automated alerts, and even financing options for SMEs. By using the right platform, small businesses can stay agile, react quickly to market shifts, and maintain competitiveness even when prices change rapidly.

Strategic Approaches to Manage Price Volatility

Supplier Diversification and Strategic Sourcing

Supplier diversification and strategic sourcing are important ways to manage raw material price volatility. Having only one supplier puts you at higher risk when prices change suddenly. By working with several suppliers from different regions, your business can avoid problems if one area faces shortages or big price jumps. This way, you get more bargaining power and reduce disruption risk.

Strategic sourcing focuses on finding reliable partners who offer stable prices and quality materials. Negotiating flexible terms and building long-term relationships can also help keep costs predictable. Small businesses and e-commerce companies find it easier to stay competitive if they are not dependent on a single supplier or region.

Long-Term Contracts and Hedging Mechanisms

Long-term contracts are another effective method for managing material costs. Locking in prices over many months or even years gives you price certainty. This can protect your margins and make planning simpler, especially in industries like manufacturing, construction, and electronics. Some suppliers may even offer better rates for loyal, long-term customers.

Hedging mechanisms are tools like futures contracts or options. These financial instruments let you fix prices or protect against big swings in costs. Large companies use hedging all the time, but smaller businesses can benefit too if they buy key materials regularly.

Alternative Materials and Sustainability Initiatives

Alternative materials are important when traditional raw materials become too expensive or scarce. By researching and switching to substitutes, you can often avoid price spikes. For example, switching from metal to durable plastics, or from palm oil to sunflower oil, can sometimes save money and improve supply chain stability.

Sustainability initiatives also help reduce volatility risk. Sourcing renewable, recycled, or local materials limits exposure to global market shocks. Plus, more consumers want eco-friendly products, so using sustainable materials can make your brand stand out.

Process Optimization and Procurement Best Practices

Process optimization and strong procurement practices help companies manage volatile material costs. Regularly reviewing your production and sourcing processes can identify where you can become more efficient. Streamlining operations reduces waste and keeps costs down even when prices rise.

Best practices in procurement include comparing suppliers, negotiating bulk discounts, and watching market trends. Implementing digital tools and software can provide real-time data that helps your team react quickly to price changes.

Agile Supply Chain Construction

Agile supply chain construction focuses on flexibility and quick response to changes. This means having backup suppliers, flexible contracts, and the ability to shift sourcing strategies fast. Agile supply chains use technology for real-time tracking and decision-making, so businesses can adjust orders immediately if prices start to rise or supply slows down. This approach is becoming more necessary after recent global disruptions like the pandemic.

E-Procurement Implementation

E-procurement implementation uses online systems to automate buying processes. These digital platforms make it easier to compare prices, approve purchases, and track spending. E-procurement gives companies more control and visibility, making it faster to respond when market conditions change. With easy reporting and alerts, your team knows when to act. Many SMEs and e-commerce businesses find e-procurement systems save time and prevent costly mistakes when managing raw material costs.

How Prediction Tools Help Small Businesses and E-Commerce Sellers

Case Studies: Cost Savings and Risk Mitigation

Case studies on the use of prediction tools show how small businesses and e-commerce sellers can achieve significant cost savings and reduce risks. For example, a craft manufacturer using AI-driven price tracking noticed a sudden rise in cotton prices. By using predictions, the company stocked up before costs spiked. This action saved around 12% on materials in the next quarter.

Another case is a small electronics seller who used price forecasting to avoid buying semiconductors during a period of sharp volatility. Instead, they waited for the predicted dip, buying at a lower price and protecting their profit margins.

Risk mitigation is also a key benefit. Some e-commerce sellers have been able to avoid out-of-stock issues by spotting trends in polymer or packaging material prices. By acting on early warnings, they adjusted purchasing schedules and found alternate suppliers, keeping their store running smoothly even when others struggled.

These real-world examples highlight how prediction tools allow small businesses to move from reactive to proactive strategies, helping them stay competitive.

Seamless Procurement and Dynamic Pricing Adjustments

Seamless procurement is a big advantage that prediction tools offer for small businesses. When raw material prices are changing rapidly, these tools can connect directly with procurement systems. This ensures automatic order placements at the most favorable price points. Businesses can adjust their purchase quantities and timing, avoiding costly peaks.

Dynamic pricing adjustments become much easier with accurate forecasts. For example, if a small seller already knows that resin prices will rise next month, they can update their product prices in advance. This reduces the risk of selling goods below cost and keeps margins steady.

E-commerce platforms can even automate price changes based on live data from prediction systems. This keeps their listings up to date and competitive, while also protecting profits from cost swings.

With data-driven procurement and pricing, small businesses can optimize efficiency without guessing, saving time and money.

Collaboration and Sharing Forecasts with Suppliers

Collaboration is another area where prediction tools shine. By sharing their forecast data with suppliers, small businesses can negotiate better terms and build stronger partnerships.

If a business predicts a spike in steel prices, they can approach the supplier early, lock in prices, or discuss alternative materials. Suppliers may appreciate the heads up and can plan their inventories accordingly. This means both sides face fewer surprises and can avoid rush orders or last-minute price hikes.

Sharing accurate forecasts also opens the door to joint planning. Suppliers and buyers can coordinate on inventory levels and delivery schedules, creating a smoother supply chain.

Overall, prediction tools make it easier to communicate with suppliers, build trust, and avoid sudden problems. This helps small businesses stay resilient, even in unpredictable markets.

Bullet Point Tips: Monitoring & Responding to Market Changes

  • Set real-time alerts for price changes using specialized platforms. This allows you to react fast when there are sudden spikes or drops.
  • Track multiple raw material prices at once to spot trends across your supply chain. Watching just one is not enough for proper risk management.
  • Subscribe to industry news and update feeds for the latest supply chain or market disruptions. Knowledge means power, especially during sudden events.
  • Use automated dashboards and reporting tools to keep your team informed. Share key info daily or weekly.
  • Review past price data and trends to anticipate seasonal or cyclical changes. Many industries face predictable peaks and dips each year.
  • Connect demand forecasts with raw material tracking so you can buy ahead or delay orders when prices move.
  • Build relationships with multiple suppliers as a backup plan. This gives you more options if a key material becomes costly or scarce.
  • Consider setting maximum acceptable price bands and automate purchase approvals when prices are within range.
  • Leverage AI-powered analytics for early warnings. These tools can alert you to risks by analyzing news, weather, or government announcements.
  • Discuss and negotiate contracts with suppliers that include price adjustment clauses or hedging agreements if possible.
  • Regularly review your product costs and adjust sales prices carefully when large cost changes happen. Notify your customers if prices must change.
  • Keep a list of alternative materials or components in case one raw material becomes too expensive or hard to get.
  • Document the actions you take during price fluctuations. This helps guide your responses next time and supports team training.
  • Join trade groups or online sourcing networks to share market intelligence and get insights from others in your industry.
  • Educate your procurement and sales teams about how market changes affect costs so everyone stays agile and informed.

Remember, staying proactive with monitoring saves money, reduces surprises, and keeps your business competitive no matter how the market changes!

Comparative Table: Top Raw Material Monitoring Tools

When comparing top raw material monitoring tools, it is important to focus on features like real-time updates, price forecasting, integration options, data sources, and ease of use. Below is a comparative table showing how popular platforms stack up for small and medium businesses, e-commerce sellers, and procurement professionals.

Tool / PlatformReal-Time Price TrackingAI ForecastingAlert & Reporting SystemData Sources & CoverageIntegration OptionsTypical UserPrice Range*
LME (London Metal Exchange)YesNoYesMetals (global)API availableMetal buyers, tradersMedium-High
ICISYesYesYesChemicals, oil, energy, plasticsAPI, ERP compatibleImporters, manufacturersMedium
Market IndexYesNoNoCommodities, metals, agricultureLimitedSMEs, e-commerceLow (Free)
MetalMiner InsightsYesYesYesMetals (U.S., global)Dashboard, Excel downloadsProcurement, manufacturersMedium
Commodity.comYesNoNoOil, gold, silver, energy, moreNoneGeneral public, SMEsFree
KplerYesYesYesEnergy, shipping, agricultureAPISupply chain, import/exportHigh
Barchart.comYesYesYesAgriculture, metals, fuelsAPI, Excel exportAnalysts, e-commerceFree-Paid
PrewaveYesYesYesMultiple (global, risk monitoring)API, integration toolsRisk managers, SMEsMedium-High
SAP Raw Material SourcingYesYesYesMultiple sectorsFull ERP integrationLarge enterprisesHigh

*Price ranges can vary greatly based on subscription level, number of users, and features. Free trials are often available.

Key features explained:

  • Real-Time Price Tracking: Shows the latest raw material prices and updates quickly.
  • AI Forecasting: Uses artificial intelligence to predict future price changes.
  • Alert & Reporting System: Sends notifications and generates reports on price changes.
  • Integration Options: How easily the tool connects to existing systems like ERP or procurement software.
  • Typical Users: Who most often uses the tool (e.g., SMEs, large enterprises, e-commerce businesses).

Each monitoring platform has its own strengths. For example, LME and ICIS are industry standards for metals and chemicals, while Barchart and Market Index cater to a broader audience, including those who want free summary data. Large businesses may prefer solutions like SAP Raw Material Sourcing for deep integration.

By comparing these tools, you can find the best fit for your business type, budget, and sourcing strategy. Always consider your specific data needs, the materials you source, and whether real-time alerts or predictive analytics matter most for your operations.

Frequently Asked Questions (FAQs)

How accurate are AI-powered price prediction tools?

AI-powered price prediction tools use advanced algorithms and data analysis to forecast raw material prices. The accuracy of these tools depends on the quality and quantity of data they receive. For common raw materials with plenty of historical data, predictions can be very close to real outcomes. However, sudden events like political changes or natural disasters can still make forecasts less accurate. Many businesses report that these AI tools offer valuable trends and alerts, helping them get ahead of market changes, but no tool is 100 percent accurate.

Can small business owners afford commercial monitoring software?

Small business owners often worry about the cost of monitoring software. Today, many platforms offer budget-friendly plans or even free tiers with basic monitoring features. While high-end systems with real-time AI analytics can be expensive, there are now several options designed for small businesses and e-commerce sellers. Some tools charge monthly fees, while others have pay-as-you-go options. It’s smart to compare current prices and feature sets before choosing a platform.

What data is required for effective fluctuation monitoring?

Effective fluctuation monitoring needs timely, accurate, and relevant data. This includes historical prices, current spot prices, supply and demand trends, and global economic indicators. Many monitoring platforms also use data from shipping records, weather patterns, and regulatory changes. The more comprehensive the data, the better your monitoring system can predict risks and suggest actions. It’s also important to regularly update your system to get the best results.

How quickly can I respond to price changes in my supply chain?

With modern tools, you can get real-time alerts and updates within seconds or minutes of a price change. These alerts help you react faster, whether it’s switching suppliers, adjusting prices, or changing order quantities. The actual response time often depends on your business processes and how quickly you make decisions after an alert. Some companies use automated systems that can trigger instant actions, making their supply chains more flexible.

Are there free resources to track raw material markets?

Yes, there are several free resources available for tracking raw material markets. Websites like Investing.com, MarketWatch, and trading platforms often publish free price charts and news updates. Some major exchanges also share basic price information without charge. While free tools might not provide detailed trend analysis or AI predictions, they are good for basic monitoring and daily updates. You can combine these with other research for a fuller market picture.

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