Global Direct Reduced Iron Market 2025 – 2034

Reports Description

As per the Direct Reduced Iron Market analysis conducted by the CMI Team, the global Direct Reduced Iron market is expected to record a CAGR of 7.5% from 2025 to 2034. In 2025, the market size is projected to reach a valuation of USD 50.3 Billion. By 2034, the valuation is anticipated to reach USD 96.4 Billion.

Overview

Direct Reduced Iron is produced by directly reducing iron ore. The procedures used to produce the DRI are known as direct reduction processes. The reducing agents in this process are hydrogen and carbon monoxide. The DRI process consists of a reduction chemical reaction that involves the removal of oxygen. The direct reduction technique generates solid metallic iron directly from solid iron ore. It is defined as the solid-state reduction of iron oxides into their corresponding elements. The reduction takes place in solid form. Because of this, there is a small probability that the elements will disintegrate in the decreased elements.

This leaves the oxides unreduced. Direct Reduced Iron has a porous structure because it is formed by the removal of oxygen from iron ore. It is also known as sponge iron because of its pores. As the pores increase the DRI’s interior surface area. The interior surface area of DRI is 10,000 times larger than that of solid iron. Direct reduced iron is generated in a variety of forms, including pellets, lumps, cold briquetted iron (CBI), fines, and hot briquetted iron (HBI). CBI and HBI are densified DRI forms that are easier to work with. HBI is created at high pressures and temperatures above 650. The surface of HBI has very few pores, which limit the reaction with air. HBI also has a strong thermal conductivity.

Key Trends & Drivers                                                                                                  

• Increasing demand for steel: The direct reduced iron industry is driven by the increasing steel demand across the globe. This increase is owing to the rising demand from end-use sectors such as buildings, infrastructure, automotive, aerospace, and appliances. Thus, the increasing end-use sector directly impacts the growth of the market. For instance, as per the data published by the European Automobile Manufacturers Association, global car sales reached 6 million units in 2024, a 2.5% increase from the previous year. Moreover, steelmakers use DRI to generate high-purity iron. DRI technology is gaining importance as the industry advances toward making steel in ways that are better for the environment and have minimal carbon impacts, including EAF with DRI. Increasing government regulation for decarbonization drives the industry expansion.

• Growth in Electric Arc Furnace (EAF) steelmaking: The market is growing significantly owing to the rising utilization of electric arc furnace steelmaking. EAF gaining popularity is due to the advantages like lower GHG emission, minimal costs, and higher energy efficiency compared to its counterparts. EAF technology makes it possible to use more DRI as a metallic feedstock, which can replace or supplement scrap metal and pig iron. This makes steel manufacturing more flexible and environmentally friendly. Also, DRI is a good raw material for making steel in an EAF, especially when you want to make steel with low carbon emissions. The steel industry’s making a great effort to cut down on carbon emissions, which is driving the industry expansion.

Challenges

• High capital & operational costs: The high capital and operational cost of direct reduced iron facilities hampers the market expansion. It can be very costly to build a DRI facility, and the cost of running it might change a lot depending on the pricing of raw materials and electricity. Natural gas is a primary raw material to use in a DRI facility, which accounts for 60%. The sharp rise in natural gas prices in the US and Europe has a direct effect on the profitability and viability of DRI production. Also, the fluctuation in the energy cost and raw material prices impacts the industry for further upgrades such as hydrogen powered facilities, which play an important role in decarbonization. When energy prices go up, the difference in cost between scrap-based Electric Arc Furnaces (EAFs) and gas-based DRI pathways gets less. This may make investors less likely to commit to big expansion projects, hampering the market growth to some extent.

• Regulatory and policy uncertainty: The regulatory and policy uncertainty might be posing a major challenge to the industry expansion. The industry is significantly impacted by government rules about steelmaking technologies, carbon emissions, and environmental standards. Since laws demand to lower the greenhouse gas emissions, people want more ecologically friendly ways to make steel, such as using DRI with Electric Arc Furnace (EAF) technology. But investors and producers don’t know how much it will cost to meet the laws or how their businesses will change, as the standards are different in several areas or are changing. Thus, impacting the industry expansion.

Opportunities

• Growing number of agreements: The increasing number of agreements in the sector drives the revenue growth. For instance, in October 2022, Midrex Technologies (Midrex), a subsidiary of Kobe Steel, and its partner in the consortium, Paul Wurth, an SMS group company, signed a deal with H2 Green Steel in Sweden to supply the new MIDREX H2™ technology for the world’s first commercial 100% hydrogen direct reduced iron (DRI) plant. The factory should be able to produce 2.1 million tonnes of DRI/HBI each year. Kobe Steel has also committed to investing in H2 Green Steel and has started talking to H2 Green Steel about buying green HBI in the future.

• Advancement in technology: Technological advancements in the business offer a potential opportunity because they have many advantages from technological developments that make production more efficient, lower costs, and safeguard the environment. Over time, established DRI technologies like MIDREX and HYL/ENERGIRON have been modified to acquire better metallization ratios and more operational flexibility. This makes the process more efficient and cost-effective. These changes include better automation, mechanisms for recovering energy, and process controls that help use resources in the best way possible.

Category Wise Insights

By Product Type

• Hot Briquetted Iron: The hot briquetted iron dominates the market. The segment expansion is attributed to the rising environmental and decarbonization initiatives. HBI emits approximately 50% less CO₂ than conventional coke-based steelmaking, driving the market growth.

• Cold Direct Reduced Iron: The cold direct reduced iron is growing at a rapid rate. CDRI is commonly used in several techniques such as electric arc furnaces (EAF), basic oxygen furnaces (BOF), and foundry applications. This versatility drives the segment expansion.

By Technology

• Gas Based: The gas based capture the largest market share in the industry. Gas-based DRI manufacturing produces lower CO₂ than coal-based techniques and classic blast furnace procedures, driving the industry growth.

• Coal Based: The coal based segment grows at a stagnant rate. The segment expansion is owing to the established technology and cost efficiency.

By Application

• Steelmaking: The steelmaking segment holds a significant revenue share. The segment growth is owing to the increasing investment in infrastructure such as roads, railways, bridges and others. Furthermore, the increasing investment in advanced technology for steelmaking drives the industry expansion.

• Electric Arc Furnace: The electric arc furnace segment is growing rapidly. EAFs paired with DRI produce significantly lower CO₂ emissions than blast furnace-basic oxygen furnace (BF-BOF) methods. This advantage drives the segment growth.

• Basic Oxygen Furnace: The basic oxygen furnace segment is growing significantly over the forecast period. BOF is a popular steelmaking technique across the globe, and it uses DRI as a feedstock in addition to scrap and pig iron.

• Foundries: The foundries hold a prominent market share. This growth is supported by consistent demand for high-quality, low-impurity iron feedstock in casting and metallurgical operations.

• Others: The others segment includes alternatives to the traditional blast furnace. The rising investment drives the market growth.

By Industry Vertical

• Construction: The construction segment dominates the market owing to the increasing investment in the construction sector across the globe. Moreover, the growing utilization of steel in making roads, buildings, and bridges drives the industry growth.

• Automotive: The automotive segment is growing rapidly. The rising production of passenger cars across the globe and increasing trends of electric vehicles drive the market growth.

• Aerospace: The aerospace segment is expected to grow significantly over the projected period. The rising air travel coupled with cheap airfare drives the demand for production of aircraft and drives the market growth.

• Others: The “others” segment includes specialty steels and ferroalloys and recycling and waste management. The growing initiatives of the circular economy florish the industry expansion.

Report Scope

Regional Analysis

The regional market is divided into North America, Europe, Asia-Pacific, and LAMEA. Here is a brief overview of each region:

• North America: North America is expected to dominate the market. Environmental regulations and the availability of natural gas are driving the region’s shift away from coal-based DRI production processes. This trend promotes clean steel production. Thus, driving the market growth.

• Europe: Europe holds a significant market share. The market’s geographical growth is driven by the growing circular economy initiatives and the presence of major players in the area. Furthermore, the growing automotive industry is expected to drive the industry expansion.

• Asia-Pacific: The Asia Pacific region is expected to grow at the highest CAGR. The market growth in the region is ascribed to several factors, such as increasing adoption of EVs, particularly in India and China, the presence of several market players, government support to reduce carbon emissions.

• LAMEA: The LAMEA area, which includes Latin America, the Middle East, and Africa, is growing significantly over the forecast period. The rising investment in infrastructure development and growing adoption of environmentally friendly technology drive the industry expansion in the region.

Key Developments

The key players operating in the market adopted several strategies including product launch, innovation, merger & acquisition, investment and others. Some of the notable developments are:

• In July 2024, Blastr Green Steel partnered with Midrex Technologies and Primetals to construct a hydrogen direct reduced iron plant in Inkoo, Finland, producing 2.0 million tons of DRI annually. The MIDREX H₂ Plant, powered by up to 100% green hydrogen, will supply hot DRI for direct charging to the steel mill, as well as hot briquetted iron, enabling Blastr to decarbonize other value chains by providing ultra-low-carbon iron feedstock for its customers.

• In January 2024, Baosteel Zhanjiang Iron & Steel launched a new direct reduced iron plant in Guangdong province, capable of producing 1 million tons per year. This facility utilizes the Energiron Zero Reformer technology developed by Tenova and Danieli, incorporating natural gas, coke oven gas, and hydrogen.

Leading Players

The Direct Reduced Iron market is highly competitive, with a large number of service providers globally. Some of the key players in the market include:

• MIDREX technologies
• KOBE STEEL LTD.
• Jindal steel and power
• Metinvest Holding LLC
• Tenova HYL SA
• JSW Steel Limited
• Qatar Steel Company FZE
• Nucor Corporation
• Essar Steel India Limited
• JFE Steel India Limited
• Iron Dynamics LLC
• Tata Steel Limited
• NLMK Group
• SAIL
• Lloyds Metals and Energy Limited
• Others

The Direct Reduced Iron Market is segmented as follows:

By Product Type

• Hot Briquetted Iron
• Cold Direct Reduced Iron

By Technology

• Gas Based
• Coal Based

By Application

• Steelmaking
• Electric Arc Furnace
• Basic Oxygen Furnace
• Foundries
• Others

By Industry Vertical

• Construction
• Automotive
• Aerospace
• Others

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America