Analysis
June 11, 2026
Brazilian pig iron deals slow on Section 301 tariff uncertainty
Written by Stephen Miller
The Brazilian pig iron market has not resumed normal production as yet. The unusually long rainy season has limited production far longer than anticipated.
And, as previously reported, pig iron exports from southern Brazil have been under pressure from their domestic steel mill and foundry demand. Usually, there is enough material to go around.
As a result, pig iron prices have continued to rally. They now exceed the $500 per metric ton (mt) FOB Brazil threshold. However, there have not been any further transactions concluded since the last sales to the US at $500/mt FOB ($530/mt CFR) in May for July shipment.
“Market here is quiet. Waiting and seeing,” the representative of a major sales channel in Brazil told SMU.
One possible reason for the lull in activity: ambiguity around tariff treatment for Brazilian pig iron. The uncertainty follows an announcement last week from the Office of the US Trade Representative (USTR) about Section 301 tariffs.
The market remains uncertain of what the final determination will be. And the outcome could cause a disruption in needed shipments. This may put added upward price pressure on prime scrap in the US domestic market. Recall that prime scrap currently stands between $450 and $470 per gross ton (gt).
“Big question mark. Everyone is on hold for this,” another source in Brazil said in reference to the tariff situation.
Higher prices for Brazilian pig iron have widened the spread between it and #1 Busheling. Based on the last confirmed sale to US buyers at $530/mt CFR, the premium for pig iron has risen to $170/gt for users on the lower Mississippi River. That’s based upon the busheling price in June $470/gt delivered. This includes the 10% tariff still being collected by US Customs and Border Protection (CBP) of 10% under Section 122. It results in a delivered figure of $640/gt.
Users in the northern US will see a spread of approximately $20-30/gt higher on a delivered basis than their southern neighbors. That’s on account of increased logistical costs and higher fuel surcharges.
Meanwhile, the price of specialty grades of pig iron, which the American foundry industry uses to make iron castings, has also skyrocketed. This material is barged upriver and stored in warehouses and distributed to various users as ordered. The added logistical and financial costs have pushed basic grade to about $690/gt FOB warehouse. Nodular and foundry grades have moved into the mid-$700s, according to a distributor in the Chicago district.
