Pig iron market on the rise

The pig iron market has entered an upward phase now that ferrous scrap in both Europe and North America has also been increasing in price.

Recall that earlier this month, US scrap prices rose $20-30 per gross ton (gt). Brazilian pig iron producers gained about $15 per metric ton (mt) on sales of several February cargoes destined for US consumers. The first series of sales were done at $415/mt FOB S. Brazil ($445 CFR) and was shortly followed by another at $420 FOB.

Scrap jumps boosting market

Most material available for February shipment has been spoken for and March shipment cargoes are being offered amid reduced seasonal production in Brazil. The Brazilian channels are aware the US scrap market is likely to rise by $20-40/gt in February. Accordingly, they have increased their offer prices.

SMU contacted a director of a major pig iron channel to learn where new offers are priced. We mentioned a reported sale at $425/mt FOB, but he denied this took place. He told SMU his channel is offering US mills a March cargo at $425-430/mt FOB, but no business has been concluded at this level. He added “Europe wants to buy, but they are waiting for more clarification for CBAM rules.”

CBAM

The European Carbon Border Adjustment Mechanism (CBAM) rules went into effect this year. They require quarterly reports on embedded emissions, both direct and indirect. Since, Brazilian pig iron uses charcoal as a reductant, the emissions are viewed as less than pig iron made using coke as a reductant. This could render coke-based pig iron at a disadvantage to Brazilian material for importation into the EU. This will have to be documented and approved.

Annual imports roughly stable

Despite US steelmakers efforts to reduce their pig iron inputs, the US still imported roughly the same quantities of Brazilian pig iron in 2025 as in 2024, according to figures from the Brazilian Pig Iron Association. The mills in the US depend on supplies being available in Brazil, since Russian material is sanctioned (as it now is in Europe). Ukraine shipments are inadequate and unreliable. Tariffs imposed by the Trump administration have made imports from other potential suppliers unworkable.

If Brazil becomes Europe’s preferred source of pig iron imports, as their transition to EAF melting takes hold, the competition for the available tonnages could result in ever higher prices. Unless hot-briquetted-iron (HBI) becomes more abundant in the US and EU to fill the void, the lack of ore-based-Metallics (OBM) will become a problem.

Stephen Miller

Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40-plus 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.