Increasing demand for Direct Reduced Iron (DRI) from infrastructure, appliances, aerospace, automotive, and other sectors is propelling the market growth. The valuation of this market is expected to reach USD 28,195.90 million in 2024.
By 2034, the market is projected to reach USD 60,013.60 million, expanding at a CAGR of 7.60%. The market is driven by several companies like Voestalpine, Salzgiter, ArcelorMittal, etc. that are boosting the creation of new DRI as well as electric arc furnaces.
| Attributes | Key Insights |
|---|---|
| Direct Reduced Iron Market Size (2024E) | USD 28,195.90 million |
| Market Valuation (2034F) | USD 60,013.60 million |
| Value-based CAGR (2024 to 2034) | 7.60% |
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| Leading Form | Lumps |
|---|---|
| Value Share (2024) | 97.60% |
The lumps segment is projected to gain 97.60% of the market share in 2024. The use of lump DRI is increasing as it has a more consistent and well-defined chemical composition that allows for improved control over the end properties of the steel being produced.
The segment is further expanding because steel manufacturers are rapidly focusing on developing high-quality steel. Since the lump form of DRI is a reliable supplement to scrap steel, it helps manufacturers achieve better quality final products.
| Leading Production Process | Gas based |
|---|---|
| Value Share (2024) | 71.40% |
The gas-based production process of direct reduced iron (DRI) is expected to obtain a 71.40% value share in 2024. The demand for gas-based processes is rising as they offer greater energy efficiency as opposed to coal-based alternatives. This results in lower production costs and lower waste heat.
The gas-based DRI is usually of higher quality, with improved metallization (iron content) and reduced levels of impurities, which is increasing its adoption to produce iron.
Principal Consultant
| Countries | Forecast CAGR (2024 to 2034) |
|---|---|
| United States | 4.20% |
| Germany | 3.50% |
| Spain | 5.60% |
| China | 8.40% |
| India | 11.30% |
The United States direct reduced iron (DRI) market is projected to expand at a CAGR of 4.20% over the forecast period. With many facilities for iron-making making their home in the United States, the country is projected to continue expanding at a steady pace.
Climate advocates had previously emphasized the upgraded and new iron and steelmaking investments to safeguard the community’s health as well as the climate. In March 2024, the Office of Clean Energy Demonstrations of the United States Department of Energy announced the initial award negotiations for the first hydrogen-ready iron-making facilities in the United States.
This iron made of green hydrogen developed from new, renewable energy sources has the potential to develop fossil-free iron in modern direct-reduced iron (DRI) furnaces.
Another notable development took place in March 2024. The United States Department of Energy chose Vale USA to commence negotiations to finance the construction of an iron ore briquette plant of USD 282.9 million. Vale’s project aims to develop a distinct iron ore briquette manufacturing facility in the country by using a patented cold sintering process to manufacture direct reduced products.
The market in Spain is predicted to expand at a CAGR of 5.60% in the next ten years. The growth of this industry is projected to be driven by new and continuous partnerships. For instance, in February 2024, Hydnum Steel and Vale inked a Memorandum of Understanding (MoU) to produce low-carbon solutions for steelmaking.
The agreement consists of jointly evaluating the possibility of constructing a collocated iron ore briquette plant in the flagship project of Hydnum Steel for green steel in Spain, precisely in Puertollano.
The direct reduced iron (DRI) market in Germany is projected to expand at a CAGR of 3.50% over the next decade. Rising investments in research and development are projected to propel market growth. For instance, in March 2024, ThyssenKrupp, the German industrial firm, was planning to develop a direct reduced iron (DRI) test facility, such as auxiliary infrastructure, at its steel plant in Duisburg, Duisburg-Nord.
The intent behind the project is to develop research into DRI production. Investments in the development of a demonstration-scale plant are projected to be USD 10.75 million. The test facility is expected to play a crucial role in the commercialization of hydrogen-based direct reduction of iron.
The latest trend impacting the market is the production of iron via green hydrogen. In August 2023, for instance, saw the launch of a direct reduction plant to produce iron via green hydrogen at the RWE AG's (ETR: RWE) power plant site in Lingen, Lower Saxony province.
India’s direct reduced iron market is anticipated to expand at a CAGR of 11.30% over the forecast period. The country is recognized as a leading producer of direct reduced iron. The demand for DRI has accelerated over the years due to the significant push given to the decarbonization of the steel industry.
Several companies are taking massive steps to lower their carbon footprint and executing relevant modernization projects. The latest trend in the market is the use of green hydrogen. It is used as a solution to solve the decarbonization challenge in the steel industry.
The steel sector's contribution to the overall CO2 in the country is claimed to be 12%. Every ton of steel produced in India emits around 2.55 tons of CO2 as opposed to the global average of 1.85 tons.
The expansion plans of the steel industry in India, motivated by the government’s ambitious infrastructure development targets, emphasize the urgency for steel producers to embrace tactics for decarbonization.
The growth of the direct reduced iron (DRI) market in China is projected to observe a CAGR of 8.40% over the forecast period. Expansion strategies adopted by market players are propelling the market growth. For instance, in January 2024, Baosteel Zhanjiang Iron & Steel set up a direct reduced iron (DRI) plant in the Guangdong province.
The new plant can develop up to one million tons of DRI annually using natural gas, hydrogen, and coke oven gas using the Energiron Zero Reformer technology produced by Tenova and Danieli.
HBIS successfully developed the commercial batch of DRI using Energiron technology in June 2023. The company enhances coke oven gas by hydrogen. Meanwhile, the firm plans to extend its hydrogen-based DRI production capacity to 1.2 million tons annually.
Key players are shifting their focus to emerging countries to meet the increasing demand for direct reduced iron. Several players are concentrating their efforts on enhancing their production capabilities.
Players are further investing in research and development activities. Additionally, the focus of the companies is on coming into collaborative partnerships to increase their revenue earnings. Industry participants are escalating their merger and acquisition activities to increase their market share.
Industry contenders are investing in new technologies to transform the DRI market. Moreover, supportive government policies are projected to augment the market growth.
Latest Developments in the Direct Reduced Iron (DRI) Market
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Current projections of the market indicate a valuation of USD 28,195.90 million in 2024.
Looking ahead to 2034, the current forecast projects a CAGR of 7.60% for the industry.
FMI predicts the market to reach USD 60,013.60 million by the year 2034.
The lumps segment is predicted to hold a significant market share in 2024, about 97.6%.
ArcelorMittal, Mobarakeh Steel, and Essar Steel are powerful players in the direct reduced iron industry.
1. Executive Summary 2. Market Overview 3. Market Background 4. Global Market Analysis 2019 to 2023 and Forecast, 2024 to 2034 5. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Form 5.1. Lump 5.2. Pellets 6. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Production Process 6.1. Coal-Based 6.2. Gas-Based 7. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Application 7.1. Steel Making 7.2. Construction 8. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Region 8.1. North America 8.2. Latin America 8.3. Western Europe 8.4. Eastern Europe 8.5. South Asia and Pacific 8.6. East Asia 8.7. Middle East and Africa 9. North America Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 10. Latin America Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 11. Western Europe Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 12. Eastern Europe Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 13. South Asia and Pacific Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 14. East Asia Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 15. Middle East and Africa Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 16. Key Countries Market Analysis 17. Market Structure Analysis 18. Competition Analysis 18.1. ArcelorMittal 18.2. Mobarakeh Steel 18.3. Essar Steel 18.4. Qatar Steel 18.5. Hadeed 18.6. Khouzestan Steel Co. 18.7. Jindal Steel & Power 18.8. Nucor 19. Assumptions & Acronyms Used 20. Research Methodology
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Direct Reduced Iron Market
