Analysis
July 28, 2026
Miller on Pig Iron: What's the result after USTR ruling?
Written by Stephen Miller
The US Trade Representative (USTR) exempted Brazilian pig iron from Section 301 tariffs for faced labor concerns, so what’s the story now in the market?
As SMU reported, that was the case that the tariffs had been exempted. And as of July 25, there are no tariffs on imported pig iron from Brazil.
Based upon the prevailing pig iron prices, this exemption saves US buyers $45-50 per metric ton (mt). Needless to say, this is a positive development for US-based EAF flat-roll producers as it lowers their costs of production.
According to US Census trade data, the US imported 3.2 million mt of pig iron in 2025. Assuming 3 million mt were imported by steelmakers vs. foundries, the yearly savings can be estimated at roughly $135 million. Other savings may be arguably possible from reduced pressure on prime scrap, which competes for furnace space with pig iron.
US takes
SMU spoke to an American pig iron expert about the effect of this recent tariff exemption. He estimates the lack of tariffs will stabilize pig iron prices at $30-50/mt over prime grades of scrap. He added, “If no tariffs, I think more pig iron will be demanded and consumed.
We also heard from a purchasing executive at a major EAF flat-roll steelmaker who has a different take.
He said even if the cost of the tariff is removed, mills are still better off melting more busheling. He thought, if prime scrap prices were to increase, a gradual shift toward more pig iron could result. Regarding prime scrap he said, “We are still $30-50 per gross ton (gt) away from seeing that shift to higher pig iron usage.”
The executive went on to say this would absolutely put a lid on prime scrap pricing, but it should not cause mills to alter their consumption rate of pig iron, materially.
Based upon the last confirmed cargo of pig iron sold to the US from Brazil of $495-500/mt CFR US port, which was a decrease of $25-30/mt, the delivered price to the buyers on the Lower Mississippi is approximately $545/gt, with no tariff. The July #1 busheling price in this district was $460/gt, thereby resulting in a premium of $85/gt. Mills in the Great Lakes region have higher logistical costs. The premium for this region increases to $110-130/gt.
There has been some divergent reporting on the destination of the most recent cargo sold from Southern Brazil at $460/mt FOB. It’s been reported Mexico was the buyer rather than the US.
Brazilian input
SMU spoke with a representative of a large channel in Brazil who said the cargo was indeed sold to the US. He did mention there was another cargo transacted for shipment to Mexico, but this occurred several weeks ago. Regarding the post-tariff market in Brazil, he said Brazilian production is back to normal levels and the market is quiet now and producers are awaiting the next move.
We also received comments from another executive at a different channel in Brazil who said Brazilian producers welcomed the news of the zero tariff with “great optimism!”
He said this could affect prices somewhat but not too much. The executive also confirmed the last cargo sold was for the US. He expects a large US-based buyer will enter the market for a cargo this week for September shipment.
The executive guesses they will start out at price indications in the mid-$450s on an FOB basis. He added that ocean freights into the Gulf are stable in the low $30s/mt.
