A survey of SteelOrbis steel market insiders finds most think US President Trump’s July 9 threat to put 50 percent tariffs on Brazilian pig iron exports into the US effective Aug. 1 will go into effect as planned tomorrow. While some industry experts told SteelOrbis weeks ago that they hoped the US might carve out a last-minute exemption for Brazilian pig iron exports, it now appears unlikely, they say.
Finished steel and scrap prices in the US could rise short term, they add, as out of a total of 4.7 million mt of pig iron imports arriving in the US in 2024, Brazil accounted for 70 percent. In H1 2025, ex-Brazil monthly basic pig iron (BPI) supply to the US was at 270,000 mt on average. A new 50 percent tariff would force US steel producers’ hands to find alternatives such as domestic prime or shredded scrap or domestically-produced pig iron, both of which can carry a higher cost versus imports from Brazil.
As for imports, Ukraine with 10 percent tariff will remain one of the major sources of pig iron for the US. Asian exporters will be also more competitive than Brazilian with a 50 percent duty. The revised rate for Indonesia is at 19 percent, while tariffs for India and Malaysia were settled at 25 percent. Resumed imports of Russian BPI as an alternative is unlikely to happen, insiders say.
“The 50 percent tariffs on Brazil could have a huge impact on the US,” said one US Gulf Coast long steel importer. “Not only on steel, but also on other products like beef. People just don’t really understand that these tariffs are just another tax to finance Trump’s big bill.”
Scrap market insiders cautioned that a decision to replace pig iron at steel mills could cause August scrap prices to rise, even though current demand for scrap remains marginal, given a continued limited steel demand outlook from the US construction and housing sectors. Today, the US Federal Reserve kept overnight lending rates steady at 4.25-4.50 percent, just days after US President Trump visited the Fed, calling for a rate cut.
“August scrap appears to be steady with some possibility of potential strong sideways pricing in some regions,” remarked one Midwest scrap dealer to SteelOrbis. “I think everyone’s attention is on pig iron and what that grade will do here with tariffs. If pig iron goes up, then it’s likely we could see prime scrap go up and bring other (scrap) grades with it.”
Since the July 9 announcement by Trump, Brazilian BPI prices on an FOB basis have declined nearly 7.5 percent from around US $403/mt to $375/mt, as Brazilian suppliers, facing the likelihood of severe reductions in exports to the US, have had to lower prices to remain competitive and trying to attract European buyers. Media reports indicate several Brazilian producers have announced plans to shut down BPI production entirely or to scale back production, with industry layoffs likely.
In the US, the absence of Brazilian sellers in the import market into the US have brought the workable price level to $445-460/mt CFR, up by $12.5/mt on average from the level seen before the announcement of tariffs on Brazil.
“Business is stopped for now as people try to figure out what is going to happen,” a US-based source told SteelOrbis recently. “Economically, with where Russian pig is being sold, it could work if Brazil gets hit with 50 percent tariff, but I have my doubts anyone will trust it long enough to move in that direction.” He added, “I also think US consumers are still pretty anti-Russian material at this point.”
During the July US scrap buy cycle, prime busheling scrap in the US Midwest settled sideways to June at $435-460/gt ($442-467/mt), while Midwest shredded scrap was steady to June at $375-380/gt ($381-387/mt), SteelOrbis data shows.
