Direct Reduced Iron Market

Direct Reduced Iron Market Size

The global direct reduced iron market was estimated at USD 73.9 billion in 2024, and it is expected to grow at a CAGR of 9.2% from 2025 to 2034. The direct reduced iron (DRI) market is expected to grow significantly due to growing demand in iron and steel across the construction, automotive, and manufacturing sectors. DRI is regarded as a substitute for traditional iron ore in steel production owing to its advantages such as lower carbon emissions and energy use.

Direct reduced iron (DRI) is a high-quality metallic product produced from iron ore used as a feedstock in electric arc furnaces, blast furnaces, and other iron and steelmaking applications. Hot briquetted iron (HBI) is a compacted form of DRI designed for ease of shipping, handling, and storage. In addition, the introduction of hydrogen and natural gas into the DRI production process has increased efficiency and made the processes eco-friendly and cheaper. Moreover, the increased availability of DRI in some developing countries, specifically in Asia Pacific and Latin America, also contributes to the remarkable market growth.

According to Midrex report, the annual global direct reduced iron (DRI) production in 2023 was 135.7 million tons (Mt). DRI output was up by 8.3Mt or 6.5% from the previous record of 127.4 Mt set in 2022. This increase was primarily due to the increase in DRI produced in India via rotary-kilns (4.6Mt / 12.9%) and natural-gas based shaft furnaces (3.7Mt / 4.1%). Thus, the combination of India and Iran is anticipated to produce over half of the global volume. This increase is fueled by the growing adoption of robust steel production methods, increases in demand from the top industrials, and the need for energy-efficient high-grade steel.

Furthermore, the market is confronted with hurdles owing to the price instability for certain key raw materials, iron ore and natural gas, brings about uncertainty to DRI producers. In addition, emerging markets have inadequate infrastructure to support the capital intensive DRI production plants further stifling growth opportunities in these regions.

Direct Reduced Iron Market Trends

• Technologies of direct reduction using hydrogen: The DRI market is heading towards the adoption of hydrogen-based DRI processes. In direct reduction of iron (DRI), the steel industry’s ongoing attempt towards decarbonized steel production is shifting towards the utilization of hydrogen instead of natural gas. This transition is encouraged by policies such as the European Union's Green Deal, which aims to decarbonize industrial processes.
  
• Shaping a greener future for steelmaking: The path to sustainable steelmaking is simple and direct. Throughout the entire steel value chain, from raw material to steel and coating, cutting-edge technologies and efficient process monitoring are shaping the journey towards sustainability. For example, Malvern Panalytical is leading this transformation by providing a blend of expertise and innovation for a greener future in the iron and steel industry.
  
• Use of space robotics in ferrous metallurgy: The combination and adoption of IoT, AI, and Big Data in DRI make automated systems which help producers to reduce the energy costs and monitor the real-time performance of furnaces with optimal energy usage. Additionally, digitalization allows predicting when a machine would break, which is essential for maintenance scheduling. The same technology eliminates risks of inefficient and unsafe machines from being operated. These innovations are crucial for DRI producers to minimize operating expenses while increasing competitiveness by automating and optimizing productivity to maximize returns on investment.
  
• Government policies supporting sustainable steel production: Policies formulated by various governments are crucial for the direction of DRI market. Most countries are formulating policies and providing subsidies that support the adoption of new and environmentally friendly technologies in steelmaking. For instance, India has the national steel policy of 2017 that emphasizes on carbon emission reduction while increasing the use of advanced energy efficient methods such as DRI.
  

Direct Reduced Iron Market Analysis

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Based on product type, the market is divided into hot briquetted iron, and cold direct reduced iron. Cold direct reduced iron (CDRI) segment generated a revenue of USD 43.8 billion in 2021 and USD 57.2 billion in 2024 at a CAGR of 9.1% due to its versatility.

• Increasing demand for premium steel propels the growth of CDRI’s market share. The construction industry is one of the primary sectors which highly relies on CDRI, as it integrates CDRI in the steel manufacturing process for electric arc furnaces (EAF) and mini blast furnaces.
  
• Unlike vertical blast furnaces, CDRI has a lower environmental footprint making it more suited to the growing trend of sustainable steel production.
  

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Based on technology, the direct reduced iron market is divided into gas-based, and coal-based. In 2024, coal-based segment held major market share, accounted for 78.3% share due to established and cost-effective production.

• The coal-based category of DRI which uses coal or coke as a reducing agent is the most widely used method for producing DRI in regions with abundant coal resources. This technology possesses a bearable and effective method of reducing iron ore, making it the preferred choice for steelmakers in developing and industrializing regions.
  
• Additionally, the operational cost needed to produce large quantity of DRI at a lower operational cost has greatly contributed to its dominant market position. Furthermore, the infrastructure in place for coal based DRI production possesses greater competitiveness which enables advantages over alternative methods.
  
  

 Based on application, the direct reduced iron market is divided into electric arc furnace, basic oxygen furnace, foundries, and others. Basic oxygen furnace segment generated a revenue of USD 31.4 billion in 2024, and it is expected to grow at a CAGR of 9.3%. This segment held substantial market share of 42.5% market in 2024 owing to its wide usage on traditional steelmaking processes.

• Basic oxygen furnace (BOF) is the most prevalent type in the production of steel from iron especially in integrated steel works. Its efficiency is high, and it is possible to produce large amounts of steel from a mixture of DRI and pig iron. However, DRI is also skillfully produced in integrated steel works. The flexibility and excellent yield in the control of the chemistry of the steel produced makes it a preferred process for the manufacture of such carbon steels for construction, automobiles and other engineering industries.
  
• Although Electric Arc Furnaces (EAF) and other technologies have become more commonly used, BOF is still major in regions where integrated steel production is common. Moreover, the use of DRI in BOF for better control of quality and for the reduction of the impurities certainly enhances this wide range market.
  

Based on end-use, the direct reduced iron market is divided into construction, automotive, aerospace, machinery & equipment, electrical & electronic, renewable energy, and others. In 2024, construction segment held substantial segmental share of 41.4% owing to the significant demand of steel in developing infrastructure.

• Steel derived from DRI is of prime importance for the building of structures like buildings, bridges, roads, and tunnels. DRI’s steel is of greater quality and longer lasts than other types, thus making it the ideal choice for construction projects that demand strength and long-term durability.
  
  
• The continuous urbanization around the world leads to a consistent strong demand for steel in construction. Further, DRI increases need due to rising shift towards sustainable energy-efficient building, as well as the growing need for cleaner methods of steel production.
  

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South Africa direct reduced iron market generated a revenue of USD 8.5 billion in 2024. South Africa market is projected to grow at a CAGR of 9.3% reaching USD 20.8 billion by 2034 due to an increasing focus on sustainable practices.

• South Africa is increasingly adopting direct reduced iron (DRI) because it is cleaner as compared to the blast furnace production. The local government is significantly active in adopting green technologies, especially in industrial production. The desire to produce steel in a more green and sustainable way reflects the country’s long-term commitment towards improving energy efficiency in manufacturing and achieving carbon neutrality.
  

The direct reduced iron market in China is expected to experience promising growth from 2025 to 2034 due to growth of increasing consumption within the country.

• China has shifted towards direct reduced iron technology in recent years. In line with the country's goals to cut carbon emissions and enhance air quality, DRI technologies sought to be embraced more comprehensively, especially where the usage of coal in blast furnace is being curbed. Demand for DRI in China’s market is enhanced by the continuing steel consumption in construction and infrastructure development.
  

Direct Reduced Iron Market Share

Top 5 companies in the direct reduced iron industry are MIDREX Technologies, Tata Steel, ArcelorMittal, JSW Steel, and Metinvest Holding. The competitive landscape of the global market is consolidated in nature, featuring both well-developed multinational corporations and mid-size companies.

The market is primarily supplied by major players in steel industry which so includes traditional DRI integrated steel makers as well as new focused DRI producers. Rival firms are competing on price, innovation, operational effectiveness, and sustainability. The opportunity for differentiation based on green and sustainable friendly steel products have made it possible for many companies to harness these environmentally friendly practices and energy saving technologies.

Direct Reduced Iron Market Companies

The DRI market is competitive due to factors such as innovation, pricing, and strategic partnership formation for joint ventures, mergers, and acquisitions. Companies are more focused towards developing new hydrogen DRI technologies, while also automating and digitalizing production processes to improve operational effectiveness. In addition to increased competition in various cost-effective emerging markets, there are also immense regional competitors that are focused on these specific business approaches. However, considering increasing stringent environmental regulations, the focus on sustainable products will increase significantly.

Midrex Technologies is a major player in direct reduction iron making technology and aftermarket solutions for the steel industry. Midrex Technologies designs direct reduced iron (DRI) plants, providing engineering, proprietary equipment, and project development services. Midrex process is unsurpassed in the industry in terms of production, reliability, and process flexibility to meet the constantly evolving nature of steelmakers and ore based metallics providers.

ArcelorMittal is one of the key players in the DRI market. The company makes huge investments in sustainability which has put them at the forefront of steel making technologies, actively trying to reduce carbon emissions with new DRI processes. The company operates several DRI plants in the U.S. and parts of Latin America, focusing on electric arc furnace (EAF) technologies and expanding the use of natural gas-based methods.

Some of the eminent market participants operating in the direct reduced iron market include:

• ArcelorMittal
• Essar
• JFE Steel
• JSW Steel
• Kobe Steel
• Metinvest Holding
• MIDREX Technologies
• Mobarakeh steel
• NLMK Group
• NUCOR Corporation
• Qatar Steel Company
• Sinosteel Corporation
• Tata Steel
• Tenova
• Ternium
  

Direct Reduced Iron Industry News

• In November 2024, Nucor Steel Louisiana reached world record production last August 2024 with 330.3 tons/hour of cold direct reduced iron (CDRI), due to its pioneering ENERGIRON technology.
  
• In August 2024, JSW Steel acquired a major portion of a group of eastern iron ore mines in India. The acquisition is geared to guarantee a constant supply of quality iron ore to the plant for DRI production.
  
• In April 2024, ArcelorMittal is set to develop innovative project at our Hamburg site in Germany aimed at the first industrial scale production and use of Direct Reduced Iron (DRI) made with 100% hydrogen as the reductant, with an annual production of 100,000 tons of steel.
  
• In April 2024, thyssenkrupp AG and EP Corporate Group agreed on EPCG’s acquisition of a stake in thyssenkrupp's steel business. EPCG will acquire 20% of thyssenkrupp’ steel business. In addition, the parties are discussing the acquisition of a further 30 percent of the steel business by EPCG. The aim is to form an equal 50/50 joint venture.
  

The direct reduced iron market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD Billion) & volume (Kilo Tons) from 2021 to 2034, 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
  • Netherlands
• Asia Pacific 
  • China
  • India
  • Japan
  • Australia
  • South Korea
• Latin America 
  • Brazil
  • Mexico
  • Argentina
• Middle East and Africa 
  • Saudi Arabia
  • South Africa
  • UAE