Prices
Brazil, US buyers reach price compromise in pig iron market
Written by Stephen Miller
September 22, 2025
A price 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.
According to an executive for a Brazilian-based sales channel, a large US mill and Brazilian producers have agreed to meet in the middle.
Our source confirmed a sale of 50,000 mt of S. Brazilian basic pig iron at a price of $395/mt FOB Vittoria. The CFR New Orleans price is estimated at $420-425/mt, which is a $5-10/mt decrease from the September cargoes, before tariff.
This material should be for October shipment, which means late November arrival to mills upriver in the Midwest and Central districts at the earliest.
Another source in Brazil confirmed this cargo concluded last week. He also commented since then he has no knowledge of any further activity. He cautioned the producers are complaining this recent price decline is too close to their breakeven point, especially with the weakening US dollar.
There should be reduced production of pig iron if prices continue downward and with the onset of rainy season, he added.
SMU contacted a US pig iron trader who said, “It seems like a necessary compromise.”
US buyers have been attempting to lower prime scrap prices, he added. Busheling prices dropped $20 per gross ton (gt) this month.
He went on to say US mills are eying another $20 drop in October.
The Brazilian producers are saying their production costs will not support lower price tags. The US buyers still face a 10% tariff on these pig imports. So, it is setting up another stand-off for October negotiations.
Let’s compare the current price of pig iron ($420/mt CFR) and domestic #1 Busheling delivered to the furnace. The mills on the Lower Mississippi paid $420-430/gt for busheling for September (assume $420/gt for this calculation).
Their cost of pig iron based on the current booking is approximately $462/gt, which is within normal parameters for these two ferrous inputs.
However, adding the tariff of 10%, the pig iron cost rises to $501/gt making the premium $81/gt. Pig iron buyers in the Chicago and Central districts, where busheling prices were averaging $405/gt, are at a premium for pig iron of $112/gt based on a tariff-included cost of $517/gt delivered.
Stephen Miller
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