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Brazil producers look to halt pig iron output as US tariff threat crimps demand

Issued at 2025-07-27



Some of Brazil’s pig iron producers are looking at halting operations as tariff tensions shrink demand from customers in the US, the top buyers of cargoes from the South American nation.

Modulax will shut down operations next week, with plans for doing maintenance work that was originally scheduled for later in the year, according to the chief executive officer Geraldo Basques. “We have no date to resume production,” he said in an interview, citing the trade concerns.

Rival producer Css Siderurgica Setelagoana said in an emailed statement that it’s operating with raw-material inventories while awaiting more clarity on the tariff situation, but also warned that it could be forced to shutter operations once the stockpiles are depleted.

The moves come as US President Donald Trump threatened a 50% levy on the Latin American country starting Aug. 1. US importers are taking a wait-and-see stance before accepting possible higher prices for the material — a critical component needed to make steel in the US.

Brazilian producers are considering granting paid leave to workers along with layoffs as some buyers have already suspended contracts, said Fausto Varela, head of industry union Sindifer. The union has been in talks with Brazilian lawmakers as trade negotiations between the nation and the US haven’t progressed as expected.

“It is almost impossible to redirect these sales to other markets in the short term,” said Varela. “If there is no market, there is no way around it: we’ll stop.”

Brazil is the US’s largest supplier of the material. And the trade is critical for the South American economy. Roughly a third of Brazil’s pig iron exports in the first half this year went the US, according to government data.

(By Carolina Pulice and Mariana Durao)


Source: Mining



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