Indirect material costs are those costs that are not directly added into the product. There are many times materials required to manufacturer a part but those materials are not put into the product. Examples of this situation are oils, lubricants for machines, sandpaper, molds and castings. There are some situations where the molds and castings would be included into the direct material costs because they specific for the product. When doing estimates in this way you have the choice of amortizing the mold and casting costs into the product or charge the customer separate as a one time charge.
Other possible indirect material costs are nuts, bolts, screws or inexpensive items. Usually this would be added into the product causing those materials to be direct costs but there are situations depending on the product being manufactured where these type of items would be indirect costs.