Using materials to craft armor

I'm currently level 10. Just finished up a quest for the Bloody Baron.

I guess I'm not sure if I'm missing something but I have all these materials like diamond dust, steel pauldrons, ingots that I have collected throughout the game. Right now all these components are just taking up space in my inventory.

When I go to craft armor, I can't really augment my armor with any of these components.

Is there something I'm missing? Am I still too early in the game to really utilize these components? All of the armors I've found have been in dungeons like the Bounty Hunter amor

You're in luck, level 10 is when the Witcher armor sets become wearable. There are several excellent guides available to find the armor diagrams, but the short answer is go to a blacksmith/armorer and see if he has a piece of paper that has the names 'Hieronymus,' 'Edwin Greloff,' 'Adalbert Kermith' or 'Ibrahim Savi.'

Gem dust is used for making your own runes later in the game.

In the most part, though, you'll eventually find you're level 30+, with endgame armor, weapons and upgrades, and hundreds of excess crafting materials. The game makes sure to load you down with far more than you'll ever use (barring those rarer components you can never quite find enough of).