US pig iron use will grow after Section 232 tariffs, IMH says
Industrial Metallurgical Holding (IMH) - the Russian company that manages the country’s largest pig iron supplier, Tulachermet - expects that the appetite of the US market for pig iron may increase in the Section 232 fallout, it 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 company said.
On Thursday March 1, US President Donald Trump announced that the country will impose tariffs of 25% on all steel product imports from next week. The decision follows the Section 232 investigation into imports that could threaten national security.
Adjusted year-to-date production until February 24 shows that mills in the US operated at an average capacity utilization rate of 73.9%, according to the American Iron & Steel Institute.
“The 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. In 2017, around 5 million tonnes of pig iron was imported into the US, according to the US Census Bureau data.
Metal Bulletin’s export price assessment on March 1 for high-manganese pig iron from the CIS region was $350-365 per tonne fob Black Sea, narrowing from $345-370 per tonne fob Black Sea a week earlier.