Low met coke costs, weak domestic market boost Indian pig iron exports to the US

India's pig iron exports to the US have surged as weak domestic steel demand, favorable trade conditions, and lower metallurgical coke costs turned exports into the most profitable outlet for many producers.

With domestic steel demand failing to absorb growing production capacity, many producers viewed pig iron exports as one of the few profitable outlets available and it is likely to remain attractive in the near term.

India exported 247,000 metric tons of pig iron to the US in April-May 2026 alone, surpassing the 131,600 mt exported in all of FY 2025-26, according to India's Joint Plant Committee data.

A perfect storm

Demand for Indian pig iron from the US began to strengthen early this year as uncertainty surrounding US tariff policy disrupted shipments from Brazil, the country's largest supplier of the steelmaking raw material, India-based market sources said.

At the same time, adjustments to US tariffs on Indian products improved the competitiveness of Indian cargoes.

Participants described the timing as "perfect" for Indian steelmakers, many of whom were already grappling with sluggish domestic steel demand and compressed margins amid heightened uncertainty across global steel markets following the Middle East conflict.

"There is no demand in the market, and India has excess [steel making] capacity, so without these pig iron exports, prices would be in a free fall," an east India-based mill said. "Pig iron for the domestic market was a loss-making proposition, finished steel exports did not have good margins, but pig iron exports to [the] US were giving good realizations, so our choices were to either reduce production or export to [the] US."

Traders also reported a sharp increase in market activity as Indian cargoes became increasingly competitive.

"We have been trading more Indian pig iron volumes. It's a growing opportunity because India's domestic demand is not keeping up," an Indian trader added.

Raw material cost

Beyond stronger export demand, Indian producers also benefited from a significant raw material cost advantage. The reopening of the US pig iron market enabled mills exporting under India's advance authorization scheme (advance license) to import metallurgical coke duty-free, insulating them from recently imposed antidumping duties and reducing pig iron production costs.

For instance, imported metallurgical coke from Indonesia, India's largest supplier, was subject to an antidumping duty of $82.75/mt during January-June. Market participants said some producers were able to avoid these additional costs through the scheme, supporting margins on pig iron export sales.

"By being able to import met coke duty free, mills got a benefit of $83/mt, which lowered their overall costs and provided good margins on pig iron exports compared to the domestic market, where they were either making losses or breaking even," an international trader said.

"Almost every pig iron producer exported to the US. Some mills even acted as aggregators, buying material from neighboring plants to build cargoes, while importing coke under the advance license," the international trader said, adding that they were aware of only a couple of end users who were paying the antidumping duty on coke imports.

"Whoever has used an advance license for met coke imports and exported pig iron has made more money than those who did not... with captive or domestic coke, the economics is pretty much normal, but the moment they take imported coke, $83/mt gets set off immediately," an Indian coke trader said.

Export economics also received a boost from the depreciation of the Indian rupee against the US dollar, improving realizations for overseas sales, market participants said.

Taken together, stronger US demand, weak domestic steel market conditions and a significant raw material cost advantage created an unusually favorable environment for Indian pig iron exports.

A market in transition

Beyond boosting pig iron exports, the opportunity has exposed growing pressure on traditional coke producers and accelerated a shift toward more integrated business models.

"I wish we had a pig iron plant, this is a really good arbitrage," a domestic coke producer said, adding that a lack of pig iron plant was weighing more heavily due to a weaker domestic coke market.

Market participants said the growing use of imported coke, particularly under export-linked schemes, has eroded demand for domestically produced material and intensified competition among merchant coke producers.

"A major coke-buying steel mill has started to procure a part of their coke requirements from imports, almost halving the demand for domestic coke... between this and more and more end users importing coke, especially as antidumping duties are set to go down, our sales volumes have decreased and the competition has increased," the coke producer said.

Despite concerns that Brazil's return to the US market could temper Indian shipments, following the US exemption of Brazilian pig iron from additional tariffs on July 15, participants said India's pig iron exports could continue into the coming months if export prices remain favorable.

The confidence reflects how quickly Indian material has expanded its presence in the US market when economics have aligned. While India remains a relatively small supplier, US Department of Commerce data showed its pig iron shipments to the US rose 87% year over year in 2025.

"Definitely the exports will continue, because government infrastructure projects are not coming up due to the challenging geopolitical scenario, so we don't have any option except to export," the east India-based steel mill said.

A west India-based steelmaker echoed the sentiments, "No one wants to reduce their production, and high volumes can only move through pig iron, so for the time being exports make most sense... and this will last as long as there is a price opportunity in the seaborne market."

The outlook could be further supported by a pending review of India's antidumping duties on imported metallurgical coke, which market participants said would influence raw material costs and export competitiveness.

"This is the future, all merchant coke plants need to have an associated steel plant to protect themselves against a market, which is so vulnerable to demand challenges and government policies," the international trader said