Brazil's Minas Gerais state is the world's largest iron ore mining center; however, due to a shortage of high-grade materials, pig iron manufacturers in Minas Gerais had to purchase raw materials from neighboring states.

The granular hematite with an iron content of 55-60% provided by local raw material suppliers was much less than the required content and affected productivity.

In the past 12 months, iron ore prices had risen by 130%, and coal prices had risen by 100%. As a result, the cost of producing pig iron had also risen sharply.

The shortage of high-grade iron ore and the increase in production costs due to the sharp rise in iron ore and coal prices may cause pig iron manufacturers in Minas Gerais could not take advantage of the current strong domestic and foreign demand and may lose their competitiveness abroad.