COP15 SUMMIT COPENHAGEN
In 2009, Brazil announced at the Cop15 summit in Copenhagen it would look to reduce its emissions by replacing coking coal used in the production of pig iron with charcoal sourced from “exotic species” (eucalyptus), this initiative was expected to increase demand for charcoal within the Brazilian pig iron industry by up to 50%.
However a series of events, notably cheaper pig iron produced by Russia, the reduction in those prices paid for pig iron in China, and rising inflation rates in Brazil subsequently led to the wide scale closure of pig iron facilities across Brazil starting in 2012.
GWD Forestry has summarised the events that have affected the pig iron industry below, that has since led to the wide scale closure of the industry in Brazil.
• In 2008 16 pig iron companies were operating in the North Brazilian pig iron stronghold of Carajas alone.
• Ferrobahia announced the development of the first pig iron production facility to be established within the state of Bahia and located in the city of Jequie.
• In 2009 shipments to the US were 1.26 million metric tonnes.
• December 4th 2009: Brazil announces new measures aimed at removing coking coal from the Brazilian pig iron industry, and replacing it with charcoal from reforestation projects established with exotic species (i.e. eucalyptus).
• In 2012 Cargill the world’s largest pig iron trader, announced it was closing its pig iron business.
• In 2012 the north Brazilian pig iron company Cosipar seen widely as a pioneer in the industry permanently closed its doors after 26 years in business.
• By 2013 out of the 16 pig iron producers located in Carajas, only five remained these were Sidepar in the state of Para, and Viena Sidergica, Queiroz Galvao, Gusa Nordeste and Margusa in Maranhao.
• China reduced its price paid for pig iron to approximately $200.00 per metric tonne whilst currently in Brazil production costs rose to $300.00 per metric tonne.
• 2016 currently only a handful of pig iron producers exist in Brazil. Most producers have now shut their doors or are operating on a reduced basis. These turn of events have reduced the price per cubic meter of charcoal substantially due to a decreased demand for eucalyptus charcoal, and increased supply.