The US import basic pig iron (BPI) market has been in chaos this week after the Trump Administration’s reciprocal tariff announcement, which means there are still a lot of uncertainties in the market. The most important developments are that Asian pig iron will no longer go to the US and that Indian and ASEAN suppliers received much higher duties than major sellers such as Brazil and Ukraine.
According to preliminary information, Brazil and Ukraine will face 10 percent tariffs, while India, which has been the third-largest pig iron seller to the US, will face a 26 percent tariff. Also, Vietnam’s tariff is 46 percent, Indonesia’s is 32 percent, while South Africa’s is 30 percent. “The Americans themselves are shocked because they did not expect this and do not know what to do. They are trying to get official confirmation from Washington that the duty has been imposed,” one of the major pig iron sellers to the US said. “What is clear is that the tariff on Southeast Asian and Indian pig iron is significantly higher than that for Brazil and Ukraine, which is a positive in this big mess in the international market in general,” a source from Brazil said.
Out of a total of 4.7 million mt of pig iron imports arriving in the US in 2024, Brazil accounted for 70 percent.
Who will pay the duty, how they will pay it and what will happen with the already signed contracts are other questions in the market. “In fact, these 10 percent duty importers must themselves pay during customs clearance, because all contracts are on CIF/CFR basis,” one of the sellers of BPI to the US said. In such a situation, some market sources believe that buyers will put pressure on pig iron suppliers, trying to offset at least some losses. “We have to wait for the detailed document from the US regarding tariffs and then we can decide what action to take next. Both Brazil and Ukraine with 10 percent tariffs have to decrease prices in my opinion,” an international trader said.
The latest two deals to the US for Brazilian BPI with 0.15 percent Fe content were signed at $450/mt FOB last week, while one of them remained unconfirmed by the time of publication, but market sources believe it was in fact done. This means that producers have managed to get $5/mt higher prices compared to the previous contracts signed earlier in March. The price translates to $475-480/mt on CFR basis. “I think Brazilian producers will try to keep the price at the current level, with the US buyers absorbing the tariff. Anyway, in the same way as in the case of charcoal costs, any booking price will depend on buyers' appetite and sellers' desperation to sell. The tariff is just one more factor the parties will need to take into account when making their decision,” a Brazil-based source said.