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Pig iron, the raw form of iron used to make steel, is vanishing from the American market: two-thirds of the pig iron U.S. steelmakers import comes from Russia and Ukraine, those shipments have ceased because of the war, and sanctions have blocked new orders for deliveries from Russia.
About 70 percent of steel made in U.S. electric furnaces is a combination of scrap steel with 10 to 20 percent pig iron; pig iron imports last year were 20 percent greater than in 2019, according to The Wall Street Journal.
Since the end of January, pig iron prices have jumped 74 percent to $940 per metric ton, S&P Global Commodity Insights reported.
That has had a domino effect: lacking pig iron, steel makers have used more scrap steel, the price of which has risen 51 percent since February, driving the price of finished steel higher.
Hot-rolled coiled sheet steel now costs 48 percent more than it did on 1 March, fetching $1,480 a ton earlier this month, S&P figures show.
Companies have been seeking new pig iron supplies from other countries; Steel Dynamics, based in Indiana, found new sources in Brazil.
Steel makers also are able to improve their process of purifying scrap steel, removing copper, stainless steel, and other impurities, leaving scrap that requires less pig iron to be reprocessed, but that extra step also adds to costs.
Pig iron got its name from steel making’s early days when liquid steel was poured into troughs dug into mills’ dirt floors. The troughs resembled a sow nursing piglets and the name has endured.
TREND FORECAST: War and recovery from war are about steel: rebuilding railways, bridges, and buildings, and replacing planes, missiles, tanks, and weapons that were consumed by the conflict.
Rebuilding Ukraine and depleted military stockpiles will demand not only years, but all the scrap steel that can be reclaimed and reprocessed.
As with most other metals—minus an economic meltdown which may prevail as the U.S. and NATO ramp up their war to “weaken” Russia—the price of pig iron and steel will remain at or near record levels for the foreseeable future.