Industrial Metallurgical Holding (IMH), which manages largest Russian pig iron supplier Tulachermet, expects the United States' appetite for pig iron to increase in the Section 232 fallout, the company told Metal Bulletin.
“We can assume that the decision [to impose trade tariffs under Section 232] will significantly increase the utilization rate of steelmaking capacities, 65% of which is [electric-arc furnace] steelmaking that consumes our pig iron,” the Moscow-based company said.
US President Donald Trump announced on Thursday March 1 that the country would impose tariffs of 25% on all steel product imports starting in the coming week. The decision follows the Section 232 investigation into imports on national security grounds.
US steel mills operated at an adjusted year-to-date production capacity utilization rate of 73.9% through February 24, according to the American Iron and Steel Institute data.
“Demand for pig iron may increase by around 1.5-2 million tonnes per year, we cautiously assume, according to estimates that capacity utilization in the US is expected to increase to 85% from the current 74%,” IMH told Metal Bulletin.
The US is the world’s largest consumer of merchant pig iron, importing around 5 million tonnes of the product in 2017, according to the US Census Bureau data.
Metal Bulletin’s assessment of high-manganese pig iron exported from the CIS region stood at $350-365 per tonne fob Black Sea on March 1, narrowing from $345-370 per tonne fob Black Sea a week earlier.