Analysis
March 12, 2026
Miller on Pig Iron: US-Brazil trade gains strength
Written by Stephen Miller
The pig iron market in the Brazil-to-US trade flow is showing strength as supply concerns and increased logistical costs impact recent sales negotiations.
We have all heard about the “rainy season,” which limits the production of charcoal used to reduce the iron ore into pig iron. However, despite this effect on supply, it is usually not enough to push prices up in a scrap market poised to enter a seasonal decline in the US.
SMU has heard from two sources in Brazil. There has been a transaction concluded at $450-452 per metric ton (mt) CFR US Port for May shipment. This cargo has not been confirmed as yet.
Freight rates up
But sources in Brazil have mentioned to SMU that the freight rates to the US have gone up significantly. Thus far, the Brazil-to-US bulk rates had not increased along with the transatlantic rates for scrap going from the US to Turkey. They have averaged $25-27/mt from Southern Brazil on 50,000 mt cargoes. But today a contact in pig iron sales says, “It’s (the freight) crazy due to the war. Shipowners don’t even want to offer!”
Another trader in Brazil told SMU nobody has confirmed a booking yet. They are still under negotiation. What is worrying sellers is the freights for May shipment and beyond. The pig iron trade from Brazil is usually done on a CFR basis, which means the seller covers the cost of the material and the freight to the destination. So, the freight is a big concern.
Supply concerns
While freight is one factor, supply is viewed as another. SMU contacted a US-based trader who noted pig iron is increasing even with scrap prices going sideways in the US this month.
“I think all is due to probable shortages of availability, uncertainty of prompt future supply,” the trader said.
It is true that supply is limited. The universe of available suppliers of imported pig iron to the US has boiled down to Brazil and, to a lesser extent, Ukraine. Tariffs and excessive freight costs have ruled out suppliers from Southeast and South Asia.
The EU previously had sought to also import from Brazil, Ukraine, and India. But the Carbon Border Adjustment Mechanism (CBAM) adoption this year has resulted in extra costs steel producers can’t afford to pay. It’s hard to imagine how Brazilian pig iron prices would be impacted if the EU was active in that market.
