A group of independent pig iron producers in the state of Minas Gerais has halted production activities due to the cancelation of orders from their clients in the US.
The cancelations reflect the decision by the US government to impose a 50 percent import tariff on all US imports from Brazil, effective from August 1.
The Brazilian producers claim that such a high tariff is canceling the competitiveness of the Brazilian pig iron in the US.
During the first half of 2025, the Brazilian independent producers exported 1.85 million mt of pig iron, of which 1.62 million mt were destined to the US.
The independent pig iron production is based on small iron ore lumps, 6 to 19 millimeters, using charcoal from plantation forests as reductant in their small blast furnaces.
They claim that their product has a “close to zero” net CO2 emissions, as the combustion of the charcoal in the blast furnace is compensated by the capture of CO2 from the atmosphere during the development of the subsequent generation of trees.
The utilization of the basic pig iron (BPG) in the production of steel is a source of carbon credits for the steel companies.
A group of politicians and industrial executives is in Washington in an attempt to reduce or at least postpone the 50 percent import tariff.