US interest in Brazilian pig iron grows

Pig iron demand is increasing in the US and internationally, while supplies of this raw material remain tight.

As pig iron demand is growing in Brazil along with the improving steel market, a few pig iron mills that were closed earlier have recently restarted; however, only a limited amount of pig iron tonnage is allocated for export, as about 65 percent of Brazil's pig iron production remains idled.

With the shortage of scrap supplies in the US market, some mills in the US are looking to buy pig iron to supplement their steel production. Recently, Brazilian pig iron suppliers had attempted to push their export prices to the level of $350/mt FOB northern Brazil, but this price level was not accepted by US mills. Currently, Brazilian pig iron export offers are in the range of $340 to $345/mt FOB northern Brazil.

The latest statistics show that total amount of pig iron imported into the US in the second quarter of 2009 was 150,416 mt, representing a decline of 714,087 mt when compared to the first quarter and also reflecting a significant decrease of 1,067,557 mt when compared to last year’s corresponding period. The top pig iron import sources for the US during the second quarter were: Brazil, at 72,969 mt; Canada, at 52,329 mt; and South Africa, at 25,118 mt.