Raw Material Prices

Miller on Pig Iron: Buyers eye lower prices

Written by Stephen Miller

May 13, 2025

Since the US ferrous scrap settlements for May have been finalized, steelmakers are turning their attention to continued pig iron flows with the wind behind their backs. Scrap prices dropped substantially for May and buyers are looking to lower pig iron prices, which actually increased during the first scrap downturn of the year in April.

Although pig iron prices are not directly coupled to scrap prices, they do trend together most of the time, despite denials from each side, depending on which way the winds are blowing.

The headwinds for US pig iron buyers are the tariffs on imports, which have elevated the procurement costs by 10%, at least for now. This has cost US mills over $40 per metric ton (mt) since the tariffs have been in effect. So, it is imperative for the raw price of pig iron to decrease to keep within a long arm’s length of prime scrap.

What’s happening in market?

SMU has heard rumors of a large sale of Brazilian pig iron last week at a price basically sideways ($445/mt FOB) from April. However, there has been no confirmation from any of our sources to substantiate these rumors. 

We contacted a US-based trader to learn what the playing field looks like. He said he has not heard of any transactions at sideways prices. 

“Mills are trying to push down prices” he added.    

Another source in Brazil said, “$445/mt FOB seems high in this market.” 

He has heard bids at $420-425 FOB, but no bookings at all. There seems to be resistance to these new offer prices.

Another source in Brazil who is responsible for pig iron sales for a group of Brazilian producers indicated said he has not heard of any bookings at $420-25/mt FOB, and $445 is the offer his group has on the table.  

Will Brazilians come to table?

The feeling is the Brazilians will have to play ball with the US mills since prime scrap has dropped $60-70 per gross ton (gt) since March. Since US mills will have to pay the tariff on any continuing purchases, it still leaves a wide chasm between pig iron and #1 Busheling.

To illustrate this, if the cost of procuring basic pig iron from S. Brazil remains sideways at $445/mt FOB, the premium for this product over the current price for #1 Busheling will be approximately $100/gt on a delivered Northern area mills basis. And it will be $75/gt to mills in the Arkansas district. 

Adding the 10% tariffs would increase the premium by about $45/gt, thereby making the premium $145/120 per gt, respectively.

If pig iron trades at the lower offers in Brazil, the premium would be only $20-25/gt less.     

Stephen Miller

Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40+ years, he has worked in all capacities in the trading business. He has had positions in both domestic and international scrap trading. In addition to scrap, Miller was at the forefront of the pig iron trade and established a pig iron distribution company under the name of Ferrosource, Inc. Most recently, Miller has concentrated on the scrap export market and regularly does consulting for several companies in the industry.

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