What is pig iron?
Pig iron, also known as crude iron, is an intermediate product of the iron industry in the production of steel which is obtained by smelting iron ore in a blast furnace. The traditional shape of the molds used for pig iron ingots is a branching structure formed in sand. Many of the individual ingots resemble a litter of piglets, hence the name.
How pig iron effects the market?
Two-thirds of pig iron imported into the U.S. comes from the Russia and Ukraine region, while the other one-third comes from Brazil. Electric Arc Furnaces (EAF) use roughly 15% pig iron in their mix. EAF producers typically use pig iron as a hedge when scrap is tight or scrap prices are elevated. As pig iron becomes more costly, scrap prices will follow. The cost of raw materials such as #1 busheling scrap and imported pig iron, both key ingredients for EAF steelmakers, have surged after the invasion of Ukraine, pushing up steel prices.
What should you do?
Pay attention to geopolitical factors in the regions that pig iron is produced. Lately, due to the conflict in Ukraine, pig iron prices have shot to over $1,000/mt, the highest price in over a decade. Subscribe to the CORE report and Majestic Market Update to get more information on pig iron.
Pricing information is reflective of the market as of the original publish date of March 25, 2022.
Pig Iron price $/tonne, Metal Bulletin. March 25, 2022