NEW YORK An increase in
imports from South Africa of a raw material similar to nodular
pig iron has triggered a fierce price war, with some U.S.
distributors now considering removing pig iron from their sales
The South African material is a
by-product of titanium dioxide production using a process
pioneered decades ago by Sorel, Quebec-based Quebec
International Titanium (QIT), a wholly owned subsidiary of Rio
Chicago-based Miller & Co.
LLC has been the exclusive U.S. distributor of QITs pig
iron product, popularly called Sorelmetal, for many years but
is now facing competition from a South African product known as
Stamford, Conn.-based Tronox
Ltd., which owns the South African mines that produce ticor,
told AMM that it doesnt own that name and refers
to its product as pig iron.
"Roughly a decade ago, our
KwaZulu-Natal Mine in eastern South Africa was part of a mining
company named Kumba. At the time, some of the iron exported to
the U.S. was referred to as ticor," Tronox said.
Although ticor has been produced
for 10 years, sources say its U.S. availability has soared over
the past year after Tronox picked Charlotte, N.C.-based
Primetrade Inc. as its exclusive sales agent in the United
U.S. distributors of nodular pig
iron produced in Brazil claim Primetrade, which is paid a
commission for each sale, has managed to undercut prices of the
product by anywhere between $25 and $100 per gross ton. Raw
material buyers at foundries that consume the material
confirmed the price differences.
Sources at some distributors and
Brazilian producers said that while Sorelmetal historically has
traded within $10 per ton of the price of Brazilian nodular pig
iron, Primetrades low sales prices for South African pig
iron have forced a price war that is allegedly making the
latter trade unviable.
Primetrade also can offer better
pricing due to its commission-based structure with Tronox,
which means it doesnt have to take a position on the
material and assume any risk, which distributors of Brazilian
nodular pig iron are obligated to do, sources claimed.
One source said that Tronox and
Primetrade increased their volumes to the United States this
year because sales to Europe dropped due to its struggling
However, a Tronox spokesman said
overall demand from U.S. foundries increased this past year.
"At present, the main drivers for exports are quality and
demand. The demand in the U.S. market over the last 12 months
was for higher-quality iron, which resulted in more tons being
shipped," he said.
Spokesmen for Tronox and
Primetrade said their companies wouldnt comment on
specific pricing, speculative statements or unsubstantiated
U.S. sellers said they are now
considering withdrawing from nodular pig iron distribution. A
source at one Brazilian producer confirmed that several U.S.
distributors had expressed their intention to step away from
"If the importation and pricing
of the Tronox material continues, it will drive several
stockholders out of the (nodular pig iron) distribution
industry," another source said. "It will also eliminate or
greatly reduce the number of Brazilian pig iron companies which
will produce (the product), as there are only five left now and
one is close to closing."
Sources claimed that Tronox and
QIT wouldnt be able to cover the supply gap if the
Brazilian supply of nodular pig iron ceased. The market is
estimated at a total of 300,000 to 400,000 tonnes per year.
"Where will the U.S. nodular
foundry industry get sufficient supply of this critical
material? After demand improves in Europe and Asia, and Tronox
regains those markets, will they continue to export heavily to
the U.S.?" one source asked.
U.S. nodular pig iron buyers
said they were booking larger volumes of the Tronox material
because it fits their needs and significantly lowers their
"I need to look out for my
companys bottom line," one buyer said. "If the product
meets our specification and costs less, thats all
Im concerned with."