Analysis
April 10, 2026
Brazilian pig iron market gaining strength
Written by Stephen Miller
The pig iron market in Brazil continues to rise, despite US scrap prices trading sideways to down for April.
This situation seems to be driven by a dearth in supply rather than increased competition or surging demand in the US.
There does not appear to be any serious competition to US buyers from Europe, especially since the onset of the EU’s Cross Border Adjustment Mechanism (CBAM). CBAM increased the cost of EU imports according to their carbon footprint.
In the US, there is good demand, but it has been accentuated by a reduction in available cargoes from Brazil over the last several months. There has also been a reduction in supplies from Ukraine. All other import sources for the US market have been either tariffed or have excessive freight.
Brazilian sources
SMU spoke with a representative of a Brazilian pig iron channel.
He told us his organization sold a 50,000 metric ton (mt) cargo to a US-based mill at $460/mt FOB Rio last week for shipment in June. This is up $10/mt from his last sale.
This results in a CFR price of $495/mt before any tariffs are applied, which are paid by the importer of record (namely US buyers).
This executive also told SMU a cargo from another channel was transacted this week at $470/mt FOB. He estimated with freight and other costs figured in the delivered cost to the US is $505/mt CFR.
This transaction was confirmed by an additional source in Brazil. So far, the increased fuel tax in Brazil has not seemed to have affected freights as they have been holding to around $30/mt for Supramax-sized cargoes.
US trader
In our last report, we quoted a US-based pig iron trader who correctly predicted pig iron prices would reach the $500/mt threshold for US buyers.
SMU contacted this trader again to learn what he predicts going forward. He said over the next 60 days scrap prices will be, “Plus/minus 5%.”
He continued, “But I think basic pig iron remains at over $500/mt CFR NOLA… possibly rising to $520-525.”
Pig iron/busheling tags
As reported in our April 9 edition, prices for #1 busheling held sideways for April shipments to US consumers. The spread between the delivered cost to mills in the US for pig iron vs #1 busheling has widened dramatically over the last month. Besides the escalation in material pricing and the tariffs, logistical costs have significantly contributed to this increase. The implementation of fuel surcharges for barge transportation is a big factor.
The recent pig iron sales at $505/mt CFR carry a tariff of approximately $45/mt, increasing the cost to $554/mt DDP barge New Orleans.
Pig iron buyers located on the Lower Mississippi in Northeastern Arkansas will see their pig iron cost rise to an estimated level of $605 per gross ton (gt) delivered into their facilities after all costs are considered.
The busheling price for April is at ~$470/gt, which results in an estimated premium of $135/gt. It gets even worse for mills in the Chicago and Central districts, which will experience a spread of about $170/gt based on the increased barging costs and their April price for busheling.
