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
Read more from Stephen MillerLatest in Raw Material Prices
Pig iron market quiet as US mills aim to outwait Brazilian suppliers
US buyers want to drop pig iron prices to levels commensurate with the decline in prime scrap in their domestic market. Prime price shed $20 per gross ton (gt) in September and another $20/gt in October.
October scrap market settles with bush down $20, shred down $10
Most mills sought a drop of $20-40 per gross ton (gt) in busheling prices and a $20/gt dip for shredded and HMS. Despite efforts to buy cheaper, the busheling price settled at down only $20/gt.
Steelmaking raw material prices stable to higher
Most steelmaking raw material prices held steady or ticked higher over the past month
Brazil, US buyers reach price compromise in pig iron market
A compromise has been reached in the pig iron market, sources told SMU. Recall we reported US buyers were bidding $390 per metric ton (mt) FOB or less while sellers were holding sideways at about $400/mt.
Pig iron market outlook cloudy
The pig iron market in Brazil is currently in flux and there have been few, if any, confirmed cargoes transacted for the US.