Direct Reduced Iron Market Size, Share & Trends Analysis Report, By End-use (Steelmaking), By Form (Cold Direct Reduced Iron, Hot Direct Reduced Iron, Hot Briquetted Iron), By Region (North America, Europe, APAC), And Segment Forecasts, 2025 - 2030

Direct Reduced Iron Market Size & Trends

The global direct reduced iron market size was estimated at USD 47.76 billion in 2024 and is projected to grow at a CAGR of 7.1% from 2025 to 2030. DRI, which is produced by reducing iron ore using natural gas or coal, is a critical raw material for steel production. As global infrastructure development accelerates and urbanization expands, particularly in emerging economies, the need for steel has surged, boosting the demand for DRI. This trend is further supported by the growing preference for DRI over traditional iron-making methods due to its lower carbon footprint and cost-effectiveness.

With increasing awareness of climate change and stricter environmental regulations, steel manufacturers seek cleaner alternatives to conventional blast furnace processes. DRI production emits significantly lower carbon dioxide levels than traditional methods, making it an attractive option for companies aiming to reduce their environmental impact. According to Midrex World Direct Reduction Statistics, world DRI production reached 135.7 million tons (Mt) in 2023, an increase of 6.5% from 127.4 Mt in 2022. Worldwide, DRI output has grown by approximately 25.6% in the last five years and by approximately 82% in the previous 10 years. Governments and organizations worldwide are also incentivizing the adoption of green technologies, further propelling the growth of the direct reduced iron industry. This shift toward sustainability aligns with global commitments to reduce greenhouse gas emissions and transition to a low-carbon economy.

Innovations in gas-based and coal-based reduction technologies have improved the efficiency and scalability of DRI production, making it more accessible to a wider range of manufacturers. In addition, the development of modular DRI plants has enabled smaller-scale producers to enter the market, further expanding its reach. These technological improvements have reduced production costs and enhanced DRI's quality and consistency, making it a more viable option for steelmakers. As a result, the adoption of DRI has increased across both developed and developing regions.

Drivers, Opportunities & Restraints

The direct reduced iron industry is primarily driven by the increasing global demand for steel, particularly from rapidly growing economies such as China, India, and other emerging markets. With a growing focus on sustainable manufacturing practices and reducing environmental impact, DRI technology is being increasingly adopted as it aligns with global carbon reduction goals. Moreover, the development of new technologies that improve the efficiency of DRI processes and their integration with renewable energy sources, such as hydrogen-based reduction, are creating further growth opportunities in the market.

The shift toward green steel production is a major opportunity for the direct reduced iron industry. As countries and companies commit to achieving net-zero carbon emissions, there is a heightened emphasis on producing steel using cleaner methods, such as hydrogen-based DRI (H-DRI) processes, which significantly reduce CO2 emissions compared to conventional methods. In addition, increasing investments in infrastructure projects across the globe create consistent demand for steel, thereby driving DRI production. The growing trend of electric arc furnaces (EAFs), which use DRI as a key input, also contributes to the demand for DRI. As such, companies that can innovate to reduce costs and improve DRI's efficiency while maintaining environmental benefits will find new business opportunities in this evolving landscape.

The high capital cost of DRI plants and the complexity of the production process can limit market expansion, particularly for smaller producers or regions without easy access to low-cost natural gas or alternative energy sources. The supply chain for key raw materials such as natural gas and iron ore can also be unstable, leading to price fluctuations that affect DRI production costs.

End-use Insights

Based on end use, the steelmaking segment led the market with the largest revenue share of 83.8% in 2024. DRI, also known as sponge iron, is a crucial feedstock in electric arc furnaces (EAFs) and other steelmaking processes due to its purity and efficiency. As global infrastructure development, particularly in emerging economies, accelerates, the need for steel in the construction, automotive, and manufacturing sectors has surged. DRI's role in enhancing the sustainability of steel production, with its lower carbon footprint compared to traditional blast furnace processes, has further driven its adoption.

The other segment, which encompasses foundry applications, ferroalloy production, and ductile iron manufacturing, is poised for steady growth due to its critical role in supporting diverse industrial processes. Foundries, which rely heavily on high-quality iron inputs for casting applications, are increasingly adopting DRI as a cost-effective and environmentally sustainable alternative to traditional pig iron and scrap. DRI's superior consistency and lower impurity levels make it an ideal feedstock for producing high-performance castings, particularly in the automotive, machinery, and construction industries.

Form Insights

Based on form, the cold direct reduced iron segment led the market with the largest revenue share of 78.8% in 2024. CDRI is produced by reducing iron ore at relatively low temperatures, typically below the melting point of iron, using natural gas or hydrogen as reducing agents. This process produces a highly metalized product that can be directly used in EAFs for steel production. Total CDRI production in 2023 was 108.7 Mt. The growing emphasis on reducing carbon emissions in the steel industry has significantly boosted the demand for CDRI, as it generates substantially lower greenhouse gas emissions than blast furnace methods.

The hot briquetted iron (HBI) is anticipated to register at the fastest CAGR over the forecast period. As steelmakers strive to reduce their carbon footprint, HBI offers a cleaner alternative to traditional iron-making processes, as its production generates fewer greenhouse gas emissions than pig iron or sinter feed. The increasing availability of natural gas and the development of hydrogen-based reduction technologies are expected to enhance the environmental benefits of HBI production further.

Regional Insights

The direct reduced iron market in North America is anticipated to grow at a significant CAGR during the forecast period. As North American economies rebound and infrastructure investments rise, the steel demand continues to expand, pushing steel manufacturers to explore efficient and sustainable production methods like DRI. According to the Midrex World Direct Reduction Statistics, North America accounted for 8.5% of global DRI production in 2023, with the United States being the largest producer in the region. The shift toward greener steelmaking processes has positioned DRI as vital in decarbonizing the steel industry.

U.S. Direct Reduced Iron Market Trends

The direct reduced iron market in the U.S. is anticipated to grow at a substantial CAGR during the forecast period. The shale gas revolution has positioned the U.S. as a global leader in natural gas production, providing a cost-effective and readily available reducing agent for DRI production. This economic advantage has spurred investments in DRI plants, particularly in regions with access to shale gas reserves. In addition, the potential to transition from natural gas to hydrogen as a reducing agent in the future further enhances the long-term viability of DRI, as hydrogen can be produced using renewable energy, enabling carbon-neutral steel production.

Asia Pacific Direct Reduced Iron Market Trends

Asia Pacific dominated the direct reduced iron market with the largest revenue share of 56.8% in 2024. The increasing demand for steel in rapidly industrializing economies such as India, China, and Southeast Asia proliferates the region's market. As these nations continue to invest in infrastructure development, urbanization, and manufacturing, the need for high-quality steel has surged. DRI, a crucial raw material for steel production, has seen a corresponding rise in demand. According to the Sponge Iron Manufacturers Association (SIMA) of India, the country maintained its position as the world's largest DRI producer, achieving a record output of 49.3 Mt in 2023.

Europe Direct Reduced Iron Market Trends

The direct reduced iron market in Europe held a significant market share in 2024. The European Union (EU) has set some of the most stringent climate targets globally, including a commitment to achieving carbon neutrality by 2050. To meet these targets, the steel industry, one of the region's largest industrial emitters of CO2, must reduce its carbon footprint. DRI, particularly when produced using natural gas or hydrogen, offers a lower-carbon alternative to traditional blast furnace methods, which use coal and coke and release large quantities of CO2.

Central & South America Direct Reduced Iron Market Trends

The direct reduced iron market in Central & South America is anticipated to grow at a significant CAGR over the forecast period. The increasing demand for steel in the region, particularly as countries such as Brazil, Argentina, and Mexico continue to expand their infrastructure and manufacturing sectors, drives the market in the region. As construction, automotive, and energy industries grow, the demand for high-quality steel products rises, prompting steelmakers to seek more efficient and cost-effective production methods.

Middle East & Africa Direct Reduced Iron Market Trends

The direct reduced iron market in the Middle East & Africa is home to some of the world's largest natural gas reserves, making it an ideal location for DRI production. Countries such as Qatar, Iran, and Saudi Arabia have an abundant and cost-effective natural gas supply, making DRI production economically viable and competitive.

Key Direct Reduced Iron Company Insights

Some of the key players operating in the market include Qatar Steel, Kobe Steel Ltd., and others.

• Qatar Steel is a leading steel manufacturing company based in Qatar, recognized for its commitment to quality and sustainability in the production of steel products. The company offers a range of products, including direct reduced iron, which is produced through innovative processes that prioritize efficiency and environmental responsibility.

• Kobe Steel Ltd. is one of Japan’s leading steelmakers and specializes in producing high-quality DRI using the MIDREX Process, primarily utilizing natural gas as a reducing agent. This method enhances the quality of the metallic product derived from iron ore and significantly reduces carbon emissions compared to traditional steelmaking processes

Recent Developments

• 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.

Direct Reduced Iron Market Report Scope

 Global Direct Reduced Iron Market Report Segmentation

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global direct reduced iron market report based on the end-use, form, and region.

• End-use Outlook (Revenue, USD Million, Volume, Kilotons; 2018 - 2030)

  • Steelmaking

  • Others

• Form Outlook (Revenue, USD Million, Volume, Kilotons; 2018 - 2030)

  • Cold Direct Reduced Iron (CDRI)

  • Hot Direct Reduced Iron (HDRI)

  • Hot Briquetted Iron (HBI)

• Regional Outlook (Revenue, USD Million, Volume, Kilotons; 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Italy

    • Germany

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

  • Central & South America

    • Argentina

  • Middle East