Direct Reduced Iron Market Research Report By Raw Material (Iron Ore, Iron Oxide, Steel Scrap), By Process (Midrex Process, HYL Process, FINMET Process), By Application (Steelmaking, Foundry, Automotive), By Size (Small Capacity (1 million tonnes per year), Medium Capacity (1-2 million tonnes per year), Large Capacity (>2 million tonnes per year)), By End User Industry (Construction, Automotive, Energy, Industrial Machinery) and By Regional (North America, Europe, South America, Asia Pacific, Middle East and Africa) - Forecast to 2032

Global Direct Reduced Iron Market Overview

The Direct Reduced Iron Market Size was estimated at USD 38.93 Billion in 2022. The Direct Reduced Iron Industry is expected to grow from USD 41.51 Billion in 2023 to USD 74.04 Billion by 2032. exhibiting a compound annual growth rate (CAGR) of 6.64% during the forecast period (2024 - 2032).

Key Direct Reduced Iron Market Trends Highlighted

Increased demand for steel in the construction, automotive, and manufacturing industries is driving the growth of the direct reduced iron (DRI) market. As steel production transitions to more environmentally sustainable methods, DRI emerges as a preferred alternative to traditional blast furnace-based production due to its significantly lower carbon footprint.Recent trends in the DRI market include the growing adoption of hydrogen-based DRI (H-DRI) technology, which offers further environmental benefits. H-DRI processes reduce iron ore using hydrogen instead of fossil fuels, resulting in near-zero carbon emissions. Additionally, the increasing deployment of electric arc furnaces (EAFs), which are compatible with DRI, supports the growth of the market.Key market opportunities lie in the potential for DRI to replace scrap metal in steel production, particularly in regions with limited scrap availability. This transition would further enhance the environmental sustainability of the steel industry. Additionally, the development of new technologies, such as the FINEX process, which combines DRI production with oxygen steelmaking, offers potential cost and efficiency advantages.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Direct Reduced Iron Market Drivers

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  Rising Demand from the Steel Industry

  
  

A key driver of the Global Direct Reduced Iron Market Industry is the rising demand from the steel industry. Direct Reduced Iron is a primary material used in the production of steel, with its consumption having increased gradually over the last several years. The main fact that contributes to this rise is that DRI is more beneficial than the traditional process of using iron ore. The iron material is reduced to a metallic form with the utilization of natural gas or coal, which yields a high-quality product and is much more environmentally friendly.Steel has always been used in virtually all kinds of industrial applications, be it construction, automotive, and manufacturing spheres or machinery and equipment. The existing pattern indicates that the current demand reflects key patterns that are likely to remain relevant in a few years. DRI has the following benefits compared to traditional iron ore: Higher purity and quality consistency, Fewer impurities Higher iron content that is equivalent to trimming the use of energy and resources that are consumed in the production of steel. These factors account for why DRI is gaining more and more popularity among the companies in the steel industry and why the latter are getting more demanding of the product.There is another additional driver to the demand for DRI – the focus on sustainable steelmaking, which the traditional iron ore process does not deliver since it is associated with a large effect on the environment. The steel production process that utilizes DRI emits much fewer greenhouse gas emissions that are ever so highly regulated and scrutinized by governments around the world. In conclusion, it should be mentioned that the demand from the steel industry, along with the numerous benefits of the product and focus on eco-friendly solutions, would definitely help the Global Direct Reduced Iron Market Industry.

Technological Advancements in DRI Production

Currently, the Global Direct Reduced Iron Market Industry is experiencing significant growth due to ongoing technological improvements in DRI gas production. In general, modern technological improvements in DRI gas production lead to higher productivity, lower costs, and an increase in product quality. Among possible technological improvements, attention should be paid to the development of new reduction processes. It is stated that traditional processes for the production of direct reduced iron based on the reforming of natural gas and limited use of coal have been successfully updated.In particular, new advanced furnaces and an optimized process control system increase the yields of DRI production facilities and reduce their specific energy requirements by up to 30. In addition to the improvements made in the traditional source of energy for DRI gas production, there were also advancements in the use of alternative fuels. According to, the DRI industry is constantly seeking ways to diversify and switch to cheaper and more sustainable energy sources that are freely available in most regions of the world. Historically, the adoption of an alternative source of energy has been caused by the high price of natural gas, but coal, biomass and waste gases were easily used as alternatives. Overall, the key beneficiaries were the companies that successfully implemented the latest technological improvements and began the production of new products, such as HBI hot briquetted iron and CDRI cold reduced iron, and used them in all their steel production sites.

Expansion of DRI Plants and Production Capacities

The global direct reduced iron market industry is growing as a result of the expansion of DRI plants and production capacities. The increasing demand on the part of the steel industry to fulfill the ever-increasing global steel production is necessitating this expansion. Given that fact, numerous steel producers, as well as DRI manufacturers, are already investing in the expansion of the existing DRI plants and opening up new DRI factories to expand production capacity. For instance, in 2023, Saudi Arabia’s Hadeed – a major steel producer, announced an investment in building a new DRI plant with a production capacity of 1.5 million tons per year. The expansion of DRI plants and production capacity is also being facilitated by the provision of enabling government policies and programs. Key nations with large steel industries are rolling out policies and initiatives that encourage investment in the production of DRI. Governments in countries with significant steel production are providing investment incentives and subsidies such as tax cuts, allocation of land resources, and access to infrastructure.

Direct Reduced Iron Market Segment Insights

Direct Reduced Iron Market Raw Material Insights

The raw material segment of the Global Direct Reduced Iron Market is expected to witness substantial growth in the upcoming years on account of increasing demand for steel production. Iron ore, iron oxide, and steel scrap are the primary raw materials used in the production of direct reduced iron. Iron ore, which is the most important raw material, is expected to occupy the largest revenue. The increasing demand for steel, especially in emerging countries, is driving the consumption of iron ore. The demand for iron ore is also increasing due to the rising adoption of advanced ironmaking technologies, such as blast furnaces and electric arc furnaces. With regard to the forecast period, iron oxide, which serves as another vital raw material for the production of direct reduced iron, is expected to witness an increase in demand because it is used as a fluxing agent. Steel scrap is also becoming an important raw material for direct reduced iron production as it enables steel recycling and offers environmental and cost benefits. All in all, the raw material segment of the Global Direct Reduced Iron Market is expected to exhibit growth over the forecast period. The leading factors contributing to this growth are the increasing demand for steel production, the growth of steel scrap as a raw material for direct reduced iron production, and the adoption of advanced ironmaking technologies.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Direct Reduced Iron Market Process Insights

The Global Direct Reduced Iron Market segmentation by Process includes the Midrex Process, HYL Process, and FINMET Process. In 2023, the Midrex Process held the largest share of the global Direct Reduced Iron Market, accounting for around 60% of the total market revenue. The Midrex Process is a widely adopted technology for producing high-quality Direct Reduced Iron (DRI) and is known for its efficiency and reliability. The HYL Process, developed by Mexico's HYLSA, is another significant process in the DRI industry, with a market share of approximately 25% in 2023.This process is particularly suitable for producing DRI from natural gas, which is an abundant resource in many regions. The FINMET Process, developed by Finland's Outokumpu, is a relatively newer technology that has gained traction in recent years due to its energy efficiency and environmental friendliness. It accounted for around 15% of the global DRI market in 2023. The growth of the FINMET Process is expected to be driven by increasing demand for sustainable and environmentally conscious steel production methods.

Direct Reduced Iron Market Application Insights

The Global Direct Reduced Iron Market segmentation by Application is broadly categorized into Steelmaking, Foundry, and Automotive. Steelmaking holds the largest market share and is expected to continue its dominance throughout the forecast period. In 2023, the Steelmaking segment was valued at USD 22.41 billion and is projected to reach USD 38.62 billion by 2032, growing at a CAGR of 6.2%. The growth can be attributed to the increasing demand for high-quality steel in construction, automotive, and other industries. Foundry and Automotive applications are also expected to witness significant growth in the coming years, owing to the rising demand for Direct Reduced Iron (DRI) in casting and automotive components manufacturing.

Direct Reduced Iron Market Size Insights

The market segmentation based on size plays a crucial role in understanding the dynamics of the Global Direct Reduced Iron Market. The three primary segments are: Small Capacity (less than 1 million tonnes per year): This segment is expected to witness steady growth over the forecast period, driven by the increasing demand from small and medium-sized steel producers. Small capacity plants are relatively cost-effective to set up and operate, making them an attractive option for emerging market players. Medium Capacity (1-2 million tonnes per year): This segment is anticipated to dominate the Global Direct Reduced Iron Market revenue in the coming years. Medium capacity plants offer a balance between cost and efficiency, catering to the needs of both large and small steel producers. The growing adoption of DRI in electric arc furnaces is further fueling the growth of this segment. Large Capacity (more than 2 million tonnes per year): This segment is expected to gain significant traction in the Global Direct Reduced Iron Market due to the economies of scale and increased efficiency offered by large-scale production. 

Direct Reduced Iron Market End User Industry Insights

The Global Direct Reduced Iron Market is segmented into various end-user industries, including construction, automotive, energy, and industrial machinery. Each industry has its unique requirements and applications for Direct Reduced Iron, leading to variations in demand and market growth. The construction industry accounts for a significant share of the Global Direct Reduced Iron Market revenue, driven by the increasing demand for infrastructure, commercial buildings, and residential projects worldwide. Direct Reduced Iron is utilized in the production of steel reinforcements, structural components, and other construction materials due to its high strength and durability.The automotive industry is another major end-user of Direct Reduced Iron, with increasing demand for lightweight and fuel-efficient vehicles. Direct Reduced Iron is used in the production of automotive components, such as engine blocks, chassis, and body panels, contributing to reduced weight and improved vehicle performance. The energy industry also utilizes Direct Reduced Iron in various applications, including power generation and transmission. Direct Reduced Iron is used in the production of boilers, pipelines, and other components due to its high-temperature resistance and durability.The industrial machinery industry relies on Direct Reduced Iron for the production of heavy machinery, such as mining equipment, construction machinery, and agricultural machinery. Direct Reduced Iron's strength and durability make it suitable for these applications, ensuring reliable performance and extended equipment life. The Global Direct Reduced Iron Market segmentation provides insights into the specific needs and trends within each end-user industry, enabling manufacturers and suppliers to tailor their products and strategies accordingly. This market data supports informed decision-making and helps stakeholders identify opportunities for growth and innovation within the Global Direct Reduced Iron Market.

Direct Reduced Iron Market Regional Insights

The Global Direct Reduced Iron Market is segmented into North America, Europe, APAC, South America, and MEA. Among these regions, APAC is expected to hold the largest market share in 2023 and is projected to continue its dominance throughout the forecast period. The growth of the APAC market is attributed to the increasing demand for steel in emerging economies such as China and India. North America and Europe are also expected to witness significant growth in the Direct Reduced Iron Market, driven by the increasing adoption of advanced steelmaking technologies. South America and MEA are expected to experience moderate growth due to the limited availability of raw materials and infrastructure.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Direct Reduced Iron Market Key Players And Competitive Insights

The Direct Reduced Iron market is highly competitive, with many key players in the marketplace. The key players of the Direct Reduced Iron Market include ArcelorMittal, HIsmelt Corporation, Midrex Technologies, Inc., Kobe Steel, Ltd., and Tenova S.p.a. The leading companies of the Direct Reduced Iron Market are continuously focusing on improving their production processes, and product development to increase the product efficiency. The Direct Reduced Iron Market is highly dependent on constantly innovated technologies. Moreover, the players are majorly focusing on the expansion of DRI applications which includes the production of clean transport fuel and direct steel manufacturing process. The detailed information of the key player has been described in the context below. Arcelor Mittal is competing in the Direct Reduced Iron Market with its highly acclaimed products and strong customer base. The company owns a number of DRI plants and has a strong customer reach. The stringent environmental regulations and depleting natural resources of steel have forced companies to explore more efficient and clean process technologies, resulting in ongoing innovations in DRI technology. Midrex Technologies, Inc. will continue to dominate the Direct Reduced Iron Market in the coming period, owing to the superior quality of its DRI and the aggressive involvement in the development of efficient DRI technologies.

Key Companies in the Direct Reduced Iron Market Include:

• Metalloinvest


• Magnitogorsk Iron Steel Works


• Hesteel Group


• POSCO


• Vale


• Hebei Iron Steel Group


• Hyundai Steel


• Tata Steel


• Rio Tinto


• Jindal Steel Power


• Baosteel


• ArcelorMittal


• Shougang Group


• Ferrexpo


• Ansteel

Direct Reduced Iron Market Industry Developments

The global Direct Reduced Iron (DRI) market is projected to reach USD 74.04 billion by 2032, exhibiting a CAGR of 6.64% from 2024 to 2032. This growth is attributed to increasing demand for steel in the construction, automotive, and manufacturing industries.Recent news developments in the DRI market include: ArcelorMittal announced plans to invest $1 billion in its DRI plant in Trinidad and Tobago, increasing its production capacity by 50%. HIsarna Steel Industries commissioned a new 1.5 million tons per year DRI plant in India, catering to the growing demand in the domestic market. Primetals Technologies received an order from HBIS Group to build a new DRI plant in China, with a production capacity of 2.5 million tons per year.These developments highlight the continued expansion and investment in the DRI market, driven by the rising demand for steel and the need for sustainable steelmaking processes.

Direct Reduced Iron Market Segmentation Insights

Direct Reduced Iron Market Raw Material Outlook

• Iron Ore


• Iron Oxide


• Steel Scrap 

Direct Reduced Iron Market Process Outlook

• Midrex Process


• HYL Process


• FINMET Process

Direct Reduced Iron Market Application Outlook

• Steelmaking


• Foundry


• Automotive

Direct Reduced Iron Market Size Outlook

• Small Capacity (1 million tonnes per year)


• Medium Capacity (1-2 million tonnes per year)


• Large Capacity (>2 million tonnes per year)

Direct Reduced Iron Market End User Industry Outlook

• Construction


• Automotive


• Energy


• Industrial Machinery 

Direct Reduced Iron Market Regional Outlook

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  North America
  
  


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  Europe
  
  


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  South America
  
  


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  Asia Pacific
  
  


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  Middle East and Africa