Analysis
November 13, 2025
Miller on Raw Materials: Pig iron market slows down
Written by Stephen Miller
The pig iron market is at a standstill since the last sale to the US several weeks ago.
Recall a cargo from South Brazil was booked by a US-based steelmaker at a price of $385 per metric ton (mt) FOB Brazil, which equates to $410-15/mt CFR before tariff. Since that time, sources in Brazil claim there has been no further business done with US buyers.
The producers in Brazil are saying they cannot lower their price offers below $385 FOB since they will lose money. The weaker US dollar has affected their profitability since they get paid in dollars, but their production costs are in Brazilian Reals.
Also, the rainy season has started, thereby increasing the price of charcoal, which Brazilian pig iron production uses as reductant in their furnaces as opposed to coke. At least one major producer with several production facilities has ceased production until conditions improve.
This has caused an impasse with their US customers who are continuously seeking lower prices since #1 Busheling tags in the US domestic market dropped in October.
But in November, scrap prices went sideways and thus far, Brazilian sellers have refused to sell at lower prices. US pig iron imports from Brazil continue to face a 10% tariff based on the FOB Brazil price.
A Brazilian-based trader told SMU a large US mill gave a bid to a major pig iron channel of $375/mt FOB. This bid was rejected and countered at $385. There has been no compromise yet.
A US pig iron trader gave his opinion to SMU. He said, “Until the scrap market falls, buyers cannot buy at lower pig prices.”
He went on to say Brazilian sellers cannot lower offers due to production costs. At the new bid prices from the US, they have other markets.
During October, besides the US-bound cargo sold at $385 FOB, SMU reported a channel in Brazil sold a cargo to Italy at $415/mt CFR Venice. This reportedly backs off to ~$375/mt FOB. So, the Brazilian sellers are saying if the US cannot improve on the offers, they have other options.
Another pig iron channel told SMU there has been no new business in November. When asked if sales to Europe were actually feasible going forward, he replied, “Yes, Europe is a reality.”
In the recent past, the US has not had competition from European buyers for Brazilian basic pig iron since Europe’s sanctions for buying Russian material had an annually decreasing quota.
In 2025, the quota was reduced to 700,000 mt and was depleted very quickly. For 2026, the quota is phased out and European imports will have to come from India, Ukraine, Zimbabwe, and now Brazil.
It should be interesting to see how this all develops. The sanctions on Russia do not seem to be anywhere near being lifted. Ukrainian production has been limited. India has some export capacity but faces a 30% tariff for US shipments. US mills still need a continuous supply of pig iron despite progress they have made with scrap upgrading.
The tariffs on pig iron are seemingly having a negative impact on the EAF flat-roll sector of the US steel industry.
