Direct Reduced Iron Market - By Product Type (Hot Briquetted Iron, Cold Direct Reduced Iron), By Technology (Gas-based, Coal-based), By Application (Electric Arc Furnace, Basic Oxygen Furnace, Foundries), By End Use, By Region & Forecast 2024 – 2032

Direct Reduced Iron Market Size

Direct Reduced Iron Market was valued at USD 67.8 billion in 2023 and is anticipated to register a CAGR of 9.1% between 2024 and 2032. The rapid market growth is credited to increasing urbanization, infrastructure development, and expanding manufacturing sectors.
 

The rise in steel consumption influences the Direct Reduced Iron (DRI) sector, driving it to a promising future. According to the World Steel Association, global steel demand was expected to reach 1.87 billion tons in 2023, up by 3.3% from 2022. This expansion is particularly seen in emerging countries, such as China and India, where urbanization and infrastructure development are fueling a construction boom.

 

The UN estimates that the world's population will reach a staggering 9.7 billion by 2050. This rapid growth will lead to increased demand for infrastructure, housing, and consumer goods, which rely significantly on steel. As populations grow, especially in emerging countries, urbanization accelerates. The World Bank predicts that by 2045, 68% of the global population will reside in urban areas. This fast urbanization will result in a boom in the construction of buildings, transit networks, and essential infrastructure, boosting the demand for direct reduced iron.
 

The direct reduced iron industry is facing significant challenges due to the fluctuating prices of its primary raw materials: iron ore and reducing agents such as coal or natural gas. This fluctuation considerably influences manufacturing costs, profitability, and overall market stability. Over the last decade, iron ore prices have fluctuated dramatically. In 2011, the Platts IODEX 62% CFR iron ore price hit a peak of over USD 190 per ton. However, two years later, the price dropped to under USD 80 per ton. The 58% decline demonstrates the possible severity of price variations. Prices of coal and natural gas, the primary reducing agents in DRI manufacturing, also show significant fluctuations. These raw material price changes present a difficult situation for DRI manufacturers. When prices rise, production costs increase, reducing profit margins. This can result in lower output or even plant shutdowns, affecting total DRI supply and price hikes.
 

Direct Reduced Iron Market Trends

Steel consumption is increasing as the world's urbanization and infrastructure development accelerates. Direct reduced iron is an important feedstock in steelmaking, especially in Electric Arc Furnaces (EAFs), which are gaining popularity due to their efficiency and environmental benefits.
 

Furthermore, advancements in furnace design and reduced agent consumption are resulting in more efficient DRI production. According to research conducted by the International Energy Agency (IEA), new technology might reduce energy usage in DRI manufacturing by 10-15%.
 

Direct Reduced Iron Market Analysis

Based on product type, the market is categorized into hot briquetted iron and cold direct reduced iron. Cold direct reduced iron (CDRI) dominated the market with a share of 76% in 2023 and is expected to reach around USD 110.2 billion by 2032. This growth can be attributed to the increasing environmental restrictions aimed at decreasing carbon emissions and improving air quality. This has prompted steelmakers to adopt cleaner production methods, boosting demand for CDRI, which emits fewer greenhouse gases than typical blast furnace ironmaking.

Based on technology, the direct reduced iron market is segmented into gas-based and coal-based. The coal-based segment was valued at around USD 53.6 billion in 2023 and is expected to grow at a CAGR of 9.3% from 2024 to 2032. Coal-based solutions provide resistance to gas price fluctuation and can be more practical in areas with large coal supplies. Furthermore, while coal-based DRI procedures have advantages in areas with low coal prices or limited availability of natural gas, gas-based techniques are frequently favored due to their reduced total running costs and environmental benefits.
 

Based on application, the market is segmented into electric arc furnace, basic oxygen furnace, foundries, and others. The basic oxygen furnace segment was valued at around USD 33.4 billion in 2023 and is expected to grow at a CAGR of 8.3% from 2024 to 2032. DRI demand in basic oxygen furnace steelmaking is driven by factors such as steel demand patterns, raw material availability, and emission & sustainability regulations. Basic oxygen furnace steelmaking supports efforts to reduce carbon emissions and improve environmental performance in the steel sector. However, direct reduced iron serves applications beyond the steelmaking and foundry industries including iron & steel powder manufacturing, DRI briquetting, iron ore pelletizing, and other industrial processes.
 

The Middle East & Africa dominated the market for direct reduced iron with a share of 39.3% in 2023 and is expected to grow at a robust CAGR of 6.1% during the forecast period. The Middle East & Africa market holds strategic importance in the global steel industry owing to the region’s vast natural resources and emphasis on technological innovation and market development. Continuous investments in technological advancements and infrastructural development fuel the regional direct reduced iron (DRI) market forward. The manufacturing sector in the Middle East & Africa is projected to reach USD 2.3 trillion by 2030. This growth creates a demand for steel, potentially boosting the adoption of direct reduced iron as a raw material.
 

Furthermore, the MEA region is rich in natural gas and coal resources, which are used as significant feedstocks for DRI manufacturing. Countries with substantial reserves include Saudi Arabia, Qatar, Iran, and South Africa, making the area an essential player in the global direct reduced iron (DRI) industry. 
 

In terms of country, the U.S. dominated the North America market with a share of near about 77% in 2023. The steel business in the U.S. is thriving due to high demand from industries such as construction, automotive, and infrastructure. Direct reduced iron is an important feedstock in steelmaking, especially in EAFs. The increasing demand for steel in the country adds to the region's high need for direct reduced iron.
 

Russia led the Europe direct reduced iron (DRI) market, accounting for a share of about 63% in 2023. The regional growth can be attributed to several key factors such as an abundance of natural resources and a strong steel industry, which accounts for a considerable portion of Europe's production capacity. As direct reduced iron is an important feedstock for steelmaking, especially in EAFs, the high demand for steel in Europe propels product penetration. Russia is positioned as a prominent producer that provides a consistent supply of these important resources to European steelmakers.
 

Direct Reduced Iron Market Share

The market is consolidated, with prominent players such as JSW Steel Limited, Jindal Steel & Power Ltd., MIDREX Technologies, Qatar Steel Company FZE, and Kobe Steel. Manufacturers are adopting strategic steps, such as mergers, acquisitions, partnerships, and collaboration, to consolidate their market position and meet the growing consumer demand.
 

Direct Reduced Iron Market Companies

Major players operating in the market include:

• ArcelorMittal
• Essar
• JFE Steel
• Jindal Steel & Power Ltd
• Jindal Steel & Power Ltd
• JSW Steel Limited
• JSW Steel Limited
• Kobe Steel
• Metinvest Holding LLC
• MIDREX Technologies
• Mobarakeh steel
• NLMK Group
• NUCOR Corporation
• Qatar Steel Company FZE
• Sinosteel Corporation
• Tata Steel Limited
• Tenova S.p.A
• Ternium
   

Direct Reduced Iron Industry News

• In February 2024, Tosyali Algerie, a steel producer in Algeria, inaugurated its second Direct Reduced Iron (DRI) production unit. The new DRI unit, located in the industrial zone of Bethioua, Oran Province, has a production capacity of 2.5 million tonnes per year.
   
• In January 2024, BHP signed an agreement with China’s HBIS Group for a Direct Reduced Iron (DRI) production trial and utilization of iron ores in blends and to progress a separate enhanced lump Stage 2 trial aimed at lowering blast furnace carbon emissions
   
• In June 2023, Kobe Steel, Ltd. and Mitsui & Co., Ltd. signed a Memorandum of Understanding (MoU) with Oman’s Public Authority for Special Economic Zones and Free Zones (OPAZ) to manufacture and sell DRI near the port of Duqm. The plant will utilize MIDREX Flex technology, which allows for initial operation on natural gas with a transition to up to 100% hydrogen. The Low-CO? Iron Metallics Project aims to produce 5 million tons of DRI with a future expansion plan under study.
   

The direct reduced iron market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD Million) and volume (Thousand units) from 2021 to 2032, for the following segments:

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Market, By Product type

• Hot briquetted iron
• Cold direct reduced iron

Market, By Technology

• Gas-based
• Coal-based

Market, By Application

• Electric arc furnace
• Basic oxygen furnace
• Foundries
• Others

Market, By End Use

• Construction
• Automotive
• Aerospace
• Machinery & equipment
• Electrical & electronic
• Renewable energy
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Spain
  • Italy
  • Portugal
  • Romania
  • Switzerland
  • Netherlands
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA