The global basic pig iron (BPI) market has been focused on discussions about the new CBAM benchmarks announced in Europe this week and possible consequences for trade flows in 2026. Even though uncertainties are still huge, Brazil is expected to be the main beneficiary, while some Asian suppliers will face great challenges.
According to the latest document from the European Commission, among the major pig iron suppliers to Europe Brazil received the lowest direct emissions default value at 1.48 Co2e/t, followed by Ukraine with 2.173 Co2e/t. This may give more opportunities for Brazilian suppliers for sales of pig iron for March shipment and beyond. According to market sources polled by SteelOrbis, based on different calculations CBAM costs for Brazilian pig iron will be from €30/mt to €35-40/mt, while for Ukraine CBAM costs are calculated at €80/mt and up to €95/mt. “We should remember that this is a default value. In fact, costs will differ a lot from producer to producer,” a trader commented. “We are not having any firm negotiations now, as the market needs to understand the real cost values. All these are just companies’ calculations,” a European source said.
Default values for pig iron imports from major suppliers to Europe
| Country | Direct emissions default value, Co2e/t |
| Brazil | 1.48 |
| Ukraine | 2.173 |
| India | 2.53 |
| Malaysia | 2.58 |
| South Africa | 3.47 |
| Zimbabwe | 3.48 |
| Indonesia | 7.92 |
The previous offers for Ukrainian pig iron to the European market were reported at a minimum of $425-430/mt CFR. However, one market source commented, “Now all customers are focused on customs clearing of already-arrived cargoes. Stocks are full. No one is eager to negotiate new bookings as all the risks will be on the buyer.” Market sources do not believe that Ukraine will give up its major share in the European pig iron market since “lead times are much better and the Brazilians may be very aggressive, so the market may stay divided between Brazil and Ukraine”, a trader told SteelOrbis.
The mood among Brazilian suppliers has been rather positive. “Brazil will be in a privileged position to supply pig iron to Europe and producers certainly expect prices to go up. The question is by how much. In my view, even more important than prices going up is Brazilians finally having an alternative to the US market,” a Brazil-based source said.
Nevertheless, all the latest business is still focused on the US market. In particular, a deal for 50,000 mt of Brazilian BPI with 0.15 percent phosphorus content has been done at $405/mt FOB for February shipment, with the destination being the US. This price is up by $10/mt from the previous deals done for January shipment and is equivalent to $430/mt CFR or above. Some market sources reported that a few producers are still quoting pig iron at $400/mt FOB.