Brazil pig iron exports fall as U.S. tariff uncertainty grows

Brazil’s Ministry of Development, Industry, Trade and Services reported that, based on Comex Stat data, pig iron exports decreased by 7.8% in volume from June 2025, but export prices increased by 42% compared to the previous year.

Datamar data points to a 14.2% decline in pig iron export volumes in the first five months of the year. Despite a 22.5% drop in shipped volume, the United States still stood out as the main destination for Brazilian cargo. The chart below shows the month-by-month volumes recorded:

Pig Iron Exports | Jan-May | 2022 – 2026 | WTMT

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Welber Barral, partner at Barral Parente Pinheiro Advogados and Brazil’s former foreign trade secretary, said it is still too early to conclude that the latest tariff threat is the main reason for the drop in export volumes or the increase in prices. He said U.S. importers may still accelerate purchases to build inventories before the additional duties, which are currently scheduled to take effect on July 15.

“The U.S. steel industry depends on Brazilian pig iron. American importers may accelerate purchases to build inventories, hoping the measure may ultimately not be implemented,” Barral said.

If the new tariff is imposed, Brazilian pig iron could face an effective duty of up to 37.5%, including the existing 12.5% tariff already applied by the United States.

The first public hearing under the U.S. trade investigation conducted pursuant to Section 301 of the Trade Act took place on Monday. The industry’s main request is that pig iron be included on the list of exempted products.

José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB), said that any announcement of new tariffs “automatically affects pig iron” because the United States is the primary destination for Brazilian pig iron exports.

“There is concern that this could slow export growth. The market is extremely uncertain today. Nobody knows what will happen tomorrow. Sometimes shipments are brought forward, and sometimes they are postponed, as companies try to remain active in the market,” he said. Castro also said the 42% increase in export prices largely reflects the recent rise in oil prices.

He suggested that if a deal between the United States and Iran leads to a decline in oil prices, pig iron exporters might gain from reduced costs—“unless a different situation causes oil prices to rise again.”

Fausto Varela Cançado, president of Sindifer-MG, the pig iron industry association in Minas Gerais, and affiliated with the state’s industrial federation, also shares this assessment. He noted that both producers and buyers continue to face significant uncertainty regarding market conditions.

“We would welcome signs that shipments are already being brought forward, because that’s exactly what happened last year. Inventories increased significantly, and exports jumped by more than 40%,” he said.

He was referring to the period when a 10% U.S. tariff was already in effect and Washington had announced plans to raise it to 50% starting in August, a measure that was ultimately not implemented. In July 2025, Brazilian pig iron exports surged 62.8% from the same month in 2024, according to Comex Stat.

Cançado said that even if the new tariff takes effect on July 15, the first meaningful impact on Brazil’s trade figures is unlikely to appear before August. He also noted that, unlike in 2025, no shipments have been suspended to date.

The industry remains hopeful that negotiations with the U.S. government and the ongoing hearings could once again yield a favorable outcome.

“We are optimistic because we were granted an exemption last year out of necessity. We are important to the U.S. economy. Our main competitors are Russia and Ukraine. Russia remains under sanctions, while Ukraine has been severely weakened and may be unable to meet demand,” he said.

Cançado also criticized what he described as the federal government’s slow pace in negotiations, arguing that direct engagement between Brasília and Washington is essential to “reverse this process politically.”

“We have also asked that, if those talks are unsuccessful, the government seek to postpone the tariffs for at least three months, giving us time to rebalance our operations and commercial relationships,” he said.

If the tariffs are ultimately imposed, Brazilian producers would need to redirect shipments to other markets. Before Trump’s return to office and the new tariff measures, Brazil exported $1.4 billion in pig iron in 2024, making it the country’s fifth-largest export to the United States, behind only crude oil, semi-finished iron and steel products, pulp, and coffee.

Barral said that while the U.S. market is important for Brazilian pig iron, global demand for the product remains strong.

“If the United States imposes tariffs on Brazilian pig iron, Brazil will begin exporting more to other destinations, while the United States will increase imports from countries such as Ukraine and Canada, Brazil’s competitors in the U.S. market. Pig iron is an essential industrial raw material. What happens, fundamentally, is a redirection of trade flows. Demand will not disappear,” he said.

According to Sindifer-MG, about 55% of Brazil’s pig iron plants could suspend operations if the tariffs take effect.

Minas Gerais is the country’s leading producer, with 48 plants and 63 blast furnaces capable of producing about 420,000 metric tonnes per month. The state accounts for roughly 70% of Brazil’s production capacity and supports about 60,000 direct and indirect jobs.