Analysis
February 10, 2026
Miller on Pig Iron: Brazilian market hums with activity
Written by Stephen Miller
There has been some recent activity of exports of basic pig iron from Brazil. Sources there agree on the activity but diverge on the pricing. What is new to the market in Brazil is the buying interest from the European Union, Italy in particular.
Prior to 2022 when the Russian-Ukrainian conflict began, Russia and Ukraine pig iron imports to the US played a large role in the US market. The balance came from northern Brazil, despite the southern regions of Brazil producing more than three times the quantity of the North.
The reason was northern Brazilian material had a phosphorous level of .10% max as opposed to .15% max in the South. Ukrainian and Russian pig iron carried the lower phosphorous levels as well from their coke-based integrated production.
After sanctions were implemented on Russian shipments to the US, imports went quickly to zero. Ukrainian shipments remained unsanctioned before dropping sharply.
This left northern Brazil the only reliable supplier of “low Phos” pig iron. US mills realized they needed much more than what they could theoretically receive from Ukraine and northern Brazil. They turned to southern Brazil to fill their needs despite the higher phos content. The price quicky jump by about $450 per metric ton (mt) for the balance of 2022.
Over in Europe during the period, a quota was imposed on Russian stock. The importable tonnages to the EU declined each year until the end of 2025, at which time no further imports were allowed. Europe is attempting to decarbonize their steel industry by transitioning to EAF production. This requires the use of ore-based metallics (OBMs) to supplement ferrous scrap in HRC steelmaking. Both pig iron and direct-reduced iron (DRI)/hot-briquetted iron (HBI) play a role in this.
Now that imports of DRI and pig iron from Russia, their largest supplier, are banned, they need to source from other countries has become a priority. The Carbon Border Adjustment Mechanism (CBAM) went into effect in January2026, which imposes an import tax based upon a product’s carbon footprint.
Regarding the EU’s need to import pig iron, the only source capable of supplying to quantities needed is Brazil. It also has the least expensive CBAM tax as compared with the few remaining countries capable of shipments. Therefore, they may also have to rely on southern Brazil for imports, just as the US is, phos levels notwithstanding.
I think you see where this is going. There is a tremendous demand for pig iron in the US and Europe, but not enough for both. The US imposes a 10% tariff on both Ukrainian and Brazilian material, which isn’t helping things.
So according to our sources in Brazil, here is what has transpired lately.
Three sources told SMU there have been two cargoes of southern Brazilian pig iron sold. One is for Italy and another for the US. The European cargo will ship in April at a disputed price of $430 to $435/mt FOB S. Brazil. The cargo for the US sold at $430/mt FOB ($458/mt CFR New Orleans before tariff) and new offers are now at $435/mt FOB, according to all sources.
Since current sales will not ship until April, this indicates the market will not calm down even if US scrap seasonally adjusts downward in the March/April. This is because of Europe’s revived interest in imports from Brazil and the reduced amount of pig iron production presently in Brazil.
The spread between Brazilian pig iron and #1 Busheling on a delivered-to-the-furnace basis is still extended in the US. Over the last several months, scrap has risen but so has pig iron. The 10% tariff on Brazilian pig iron has contributed to the spread.
For shipments to EAF mills on the Lower Mississippi River, where busheling prices were $460-470 per gross ton (gt) this month, pig iron from S. Brazil, based on an FOB price of $430/mt, delivers to these mills at ~$548/gt with the $40+ tariff included. Mills in the northern tier of the US have higher logistical costs. The average busheling price was $455-460/gt. Pig iron delivers to mills in this region at ~$572/gt, tariff included.
