Analysis
July 23, 2026
Miller on Pig Iron: Brazilian trade with US picks up
Written by Stephen Miller
The Brazilian pig iron trade with the US has resumed after a month of inactivity.
As SMU has previously reported, the US Trade Representative (USTR) agreed to exempt Brazilian pig iron from the 301 tariff of 25% last week. It is uncertain if pig iron of Brazilian origin will be exempt from the 10-12.5% tariffs imposed for the forced labor issue. However, there is optimism on both sides of the equator this exemption will also be approved.
Still, after a slow month, it didn’t take long before business with Brazil resumed.
SMU spoke with an executive director of a large channel in South Brazil who confirmed a sale of a 55,000 metric ton (mt) cargo took place this week by another channel.
He said the price fell $40/mt to $460/mt on an FOB Brazil basis from the last series of sales in May of $500/mt FOB.
It is estimated the CFR New Orleans price is $495-500/mt based on the prevailing freight rates, exclusive of any potential tariff. This price drop surprised many players in the trade.
We also heard from a trader in Brazil who said this sale was “totally out of timing!”
He said the reason this price fell to this level was the sales channel already had the material at the port and were facing the prospect of having to start paying a storage fee. He added other sellers are waiting for the final outcome on tariffs from the USTR. This decision is expected by July 24.
Another US-based trading source said Brazil may have had to reduce their offers to accommodate the tariff situation as US steelmakers still have other options. He continued to say that for pig iron “to stay in the menu line, the price must remain at value to DRI and scrap.”
Sources have told SMU Brazilian pig iron is facing recent competition from other countries. India has been able to ship 3-4 cargoes to the US over the last several months at prices under the Brazilian levels, despite higher freights.
It is debatable if this supply chain will be able to continue to be relied upon with logistical bottlenecks caused by the situation in the Persian Gulf and Red Sea.
Brazil also has competition from Ukraine, but not necessarily on price since Ukrainian material is “Low Phos” while Southern Brazil produces the “High Phos” grade.
However, according to the Ukrainian State Customs Service, shipments have declined over the last several months. In May, Ukraine shipped only two cargoes (110,000 mt) and June is estimated at 2-3 cargoes as the report is not official.
So, the question about where prices will trend for Brazilian pig iron are uncertain. Will the recent sales price of $460 be the new benchmark for future sales? Or will this be viewed as a “one and done?” We should have the answer soon.
