Direct Reduced Iron (DRI) Market

• The global Direct Reduced Iron (DRI) Market was valued at approximately USD 74.27 billion in 2024 and is projected to reach USD 176.41 billion by 2034, growing at a CAGR of 9.04% during the forecast period.

• Asia Pacific dominated the market with a share of 58.89% in 2023, driven by significant production capacities in countries like India and Iran, which together accounted for over 60% of global DRI production.

• The gas-based DRI production process led the market with a 71.4% share in 2024, favored for its energy efficiency and lower carbon emissions compared to coal-based methods.

• Cold Direct Reduced Iron (CDRI) accounted for more than 78% of the market share in 2024, owing to its suitability for electric arc furnace (EAF) steelmaking and its role as a substitute for scrap metal.

• Technological advancements in hydrogen-based DRI processes are gaining traction, with pilot projects underway in Europe and Australia aiming to produce low-carbon steel and reduce greenhouse gas emissions.

• Key players in the market include Midrex Technologies, ArcelorMittal, POSCO, Voestalpine, and JSW Steel, focusing on expanding production capacities and adopting sustainable technologies to meet growing demand.

• Challenges such as high capital investment, volatile raw material prices, and the need for infrastructure development in emerging markets may impact market growth. However, the push for decarbonization in the steel industry presents significant opportunities for DRI adoption.

• In October 2022, H2 Green Steel established a Direct Reduced Iron (DRI) plant in northern Sweden, powered entirely by 100% green hydrogen and utilizing Midrex technology. The Midrex H2 plant produces 2.1 million tonnes of hot DRI and Hot Briquetted Iron (HBI) annually, supporting the production of 2.5 million tonnes of green steel. The innovative system is developed by a consortium of Midrex and Paul Wurth, part of the SMS group.

• In May 2022, Kobe Steel launched “Kobenable Steel”, becoming Japan’s first provider of low CO₂ blast furnace steel products. By optimizing the ironmaking process, the company achieved significant CO₂ emission reductions and plans to commercialize these eco-friendly steel products in fiscal year 2023.

In this report, the Direct Reduced Iron (DRI) Market has been segmented by Production Process, Form, Raw Material, Process, Application and Geography.

Direct Reduced Iron (DRI) Market, Segmentation by Production Process

The Direct Reduced Iron (DRI) Market has been segmented by Production Process into Coal-Based and Gas-Based.

Coal-Based

The coal-based production process relies heavily on the use of coal or coal-derived reducing gases to transform iron ore into metallic iron. Although this method benefits from established infrastructure and widespread availability, it is associated with higher carbon emissions. Growing environmental concerns and rising regulatory pressures are gradually limiting its adoption. Despite this, coal-based production still accounts for a significant portion of output in emerging economies.

Gas-Based

The gas-based process employs natural gas, particularly hydrogen and carbon monoxide, as reducing agents for iron oxide. It is increasingly being adopted due to its lower greenhouse gas emissions compared to coal-based methods. Industries focusing on sustainability and eco-friendly practices are driving its expansion. With ongoing technological innovations, gas-based production is expected to dominate future growth in DRI production globally.

Direct Reduced Iron (DRI) Market, Segmentation by Form

The Direct Reduced Iron (DRI) Market has been segmented by Form into Lumps and Pellets.

Lumps

DRI in the form of lumps is directly charged into electric arc furnaces for steelmaking, offering cost-effective and simple handling. Lumps are widely used in regions where mining infrastructure supports direct extraction and processing. However, the irregular size distribution can impact efficiency and smelting quality. Despite limitations, lumps continue to play a role in markets with abundant raw resources.

Pellets

Pellets are increasingly preferred due to their uniform size and superior metallurgical properties, enabling higher furnace productivity. They reduce energy consumption during steel production and ensure consistent quality output. With growing emphasis on efficiency and sustainability, pellets are seeing stronger demand compared to lumps. The segment benefits significantly from ongoing global infrastructure development.

Direct Reduced Iron (DRI) Market, Segmentation by Raw Material

The Direct Reduced Iron (DRI) Market has been segmented by Raw Material into Iron Ore, Iron Oxide and Steel Scrap.

Iron Ore

Iron ore remains the primary raw material for DRI production, offering abundant global reserves and reliable quality. It provides high metallic content, making it suitable for large-scale steel production. Market demand for iron ore is strongly tied to construction and automotive industries. Its importance is further reinforced by technological advancements in ore beneficiation and processing.

Iron Oxide

Iron oxide serves as a vital input, particularly in controlled DRI processes where higher purity is required. It allows for better energy efficiency and lower emissions during reduction. The rising emphasis on green steel production is driving its adoption across industries. With its ability to provide consistent quality, iron oxide-based input is expected to see steady growth in global markets.

Steel Scrap

Steel scrap is increasingly being integrated as a supplementary raw material in DRI production. Its usage promotes recycling and enhances sustainability within steel supply chains. Combining scrap with DRI in electric arc furnaces improves efficiency and reduces overall emissions. The circular economy trend is boosting reliance on scrap, strengthening its role in modern steelmaking.

Direct Reduced Iron (DRI) Market, Segmentation by Process

The Direct Reduced Iron (DRI) Market has been segmented by Process into Midrex Process, HYL Process and FINMET Process.

Midrex Process

The Midrex process dominates the DRI industry, accounting for the largest global market share. It uses natural gas for reduction and is valued for its operational efficiency and scalability. Its widespread adoption is supported by lower energy costs and reduced carbon emissions. As sustainability initiatives increase, Midrex technology continues to expand across steel-producing nations.

HYL Process

The HYL process is recognized for its high flexibility and ability to operate on different reducing agents. It supports variable gas mixes, offering adaptability to changing raw material supplies. HYL enhances efficiency in operations where natural gas is abundant. Its adoption is rising in regions prioritizing sustainable steelmaking and reducing carbon footprints.

FINMET Process

The FINMET process employs fluidized bed reactors to achieve rapid reduction of fine ores. It provides benefits in energy optimization and improves production rates for large-scale plants. However, the high operational cost and complexity limit its wider application. With ongoing research in process improvement, FINMET is anticipated to gain selective adoption in advanced steelmaking hubs.

Direct Reduced Iron (DRI) Market, Segmentation by Application

The Direct Reduced Iron (DRI) Market has been segmented by Application into Steel Production and Construction.

Steel Production

In steel production, DRI is used extensively in electric arc furnaces to manufacture high-quality steel with fewer impurities. It supports cleaner production processes and reduces overall carbon emissions compared to traditional blast furnaces. Rising demand for low-carbon steel is increasing the importance of DRI in industrial operations. The trend towards sustainable metallurgy ensures the dominance of this application segment.

Construction

DRI plays a crucial role in producing structural steel and reinforcement bars for the construction industry. Its usage ensures superior strength and durability in large-scale infrastructure projects. With rapid urbanization and growing investment in real estate and public works, demand for DRI in construction is accelerating. The sector benefits significantly from its ability to deliver high-quality steel at competitive costs.

Direct Reduced Iron (DRI) Market, Segmentation by Geography

The Direct Reduced Iron (DRI) Market has been segmented by Geography into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

North America

North America accounts for around 18% of the global DRI market, supported by advanced steelmaking infrastructure. Stringent environmental regulations are promoting gas-based processes, particularly in the United States. Rising investment in green steel projects and adoption of electric arc furnaces enhance regional growth. With stable industrial demand, the region continues to attract technology-driven investments.

Europe

Europe represents nearly 22% of the DRI market, driven by its push towards decarbonization in steel production. Countries such as Germany and Sweden are investing in hydrogen-based technologies. The region’s strict climate policies encourage innovation and sustainable practices. With strong industrial demand, Europe remains a frontrunner in clean steelmaking transitions.

Asia Pacific

Asia Pacific holds the largest share at approximately 42%, owing to rapid industrialization and infrastructure expansion in China and India. The availability of raw materials and growing steel demand drive large-scale adoption. Investments in advanced production technologies are further boosting regional dominance. With its expanding manufacturing base, Asia Pacific remains the key growth engine for DRI.

Middle East & Africa

Middle East & Africa contribute around 10% of the DRI market, supported by abundant natural gas resources. Countries such as Iran and Saudi Arabia are leading producers, leveraging cost-effective gas-based methods. Rising industrialization and demand for construction steel drive further expansion. With favorable energy economics, the region is strengthening its role in global supply chains.

Latin America

Latin America holds nearly 8% of the global DRI market, with Brazil being a major contributor. The region benefits from strong mineral resources and growing construction activity. Increasing adoption of electric arc furnaces enhances steel production efficiency. Continued investment in industrial capacity positions Latin America as an emerging growth hub for DRI demand.

This report provides an in depth analysis of various factors that impact the dynamics of Global Direct Reduced Iron (Dri) Market. These factors include; Market Drivers, Restraints and Opportunities Analysis.

Drivers, Restraints and Opportunity Analysis

Drivers :

• Shifting Steelmaking Technologies

• Focus on Sustainability - The Global Direct Reduced Iron (DRI) Market is increasingly emphasizing sustainability as a key driver of growth and innovation. Traditional steelmaking processes, which rely on fossil fuels and produce substantial CO2 emissions, are facing growing scrutiny due to environmental concerns. As a result, there is a notable shift towards adopting more sustainable practices within the DRI sector.

  One of the primary sustainable advancements in DRI production is the development of hydrogen-based reduction processes. Unlike conventional methods that use coal or natural gas, hydrogen-based DRI production significantly reduces greenhouse gas emissions by utilizing hydrogen as a reducing agent. This transition aligns with global efforts to mitigate climate change and reduce carbon footprints, making hydrogen-based DRI a focal point for future investments.

  Additionally, the emphasis on sustainability extends to the recycling and efficient use of resources. The use of DRI in Electric Arc Furnaces (EAF) not only improves the efficiency of steel production but also promotes the recycling of scrap steel, further reducing the environmental impact. This sustainable approach is becoming increasingly vital as industries and governments prioritize eco-friendly practices and work towards achieving carbon neutrality. The growing focus on sustainability in the DRI market reflects a broader commitment to environmental stewardship and innovation in the steelmaking industry.

Restraints :

• Energy Prices

• Technological Advancements - Technological advancements are pivotal in shaping the future of the Direct Reduced Iron (DRI) market, driving both efficiency and sustainability. Innovations in DRI production technologies are focused on enhancing the efficiency of the reduction process, improving the quality of the final product, and minimizing environmental impact.

  One significant advancement is the development of hydrogen-based DRI production technologies. Traditional methods use natural gas or coal, which contribute to high CO2 emissions. In contrast, hydrogen-based reduction processes employ hydrogen as a reducing agent, offering a cleaner alternative with significantly lower carbon emissions. This shift aligns with global sustainability goals and is supported by increasing investments in hydrogen infrastructure and technology. Companies are exploring ways to scale up these technologies and integrate them into existing steelmaking operations, marking a transformative step towards greener steel production.

  Another area of technological progress is the optimization of DRI production processes through automation and advanced control systems. Enhanced automation improves process control, reduces operational costs, and increases the overall efficiency of DRI production. Innovations such as real-time monitoring and advanced data analytics enable better management of production parameters, leading to higher-quality DRI and reduced energy consumption.

  Moreover, research is underway to develop more efficient methods for pelletizing and processing DRI, addressing challenges such as the quality of feedstock and the handling of by-products. These advancements are expected to improve the performance of DRI in various applications, including steelmaking and construction, while also supporting the industry's shift towards more sustainable practices.

  Overall, technological advancements in the DRI market are crucial for meeting the growing demand for high-quality steel products while adhering to environmental regulations and sustainability goals. These innovations are set to redefine the market landscape, driving both growth and transformation in the steelmaking industry.

Opportunities :

• Strategic Investments

• Trade Dynamics - Trade dynamics play a crucial role in shaping the Global Direct Reduced Iron (DRI) Market, influencing supply chains, pricing, and market access. The trade of DRI is significantly affected by regional production capacities, trade policies, and global economic conditions. Major producing countries, particularly those with advanced steel industries, engage in both import and export activities to balance domestic supply with international demand. The flow of DRI between countries is often driven by factors such as production costs, trade tariffs, and regional steel demand, which can lead to fluctuations in market prices and availability.

  Additionally, the evolving focus on sustainability and environmental regulations is impacting trade dynamics in the DRI market. Countries and regions with stringent environmental standards may impose higher tariffs or regulations on imports of DRI produced using traditional methods with higher carbon footprints. Conversely, nations investing in cleaner, hydrogen-based DRI technologies are likely to experience increased trade opportunities and market access. This shifting landscape underscores the importance of adapting trade strategies to align with global sustainability goals and technological advancements, influencing how countries participate in the global DRI market.

Direct Reduced Iron (DRI) Market is shaped by intense competition where manufacturers emphasize cost efficiency, sustainability, and integrated supply chains. Companies are pursuing strategies involving collaboration and partnerships with steelmakers to secure long-term demand. The market is witnessing consolidation, with regional players aligning through merger activities to strengthen their positions and drive consistent growth.

Market Structure and Concentration
The competitive framework is moderately consolidated, with a mix of established leaders and emerging participants. Larger enterprises control a significant percentage (%) of production through vertically integrated models. Smaller producers rely on niche markets and localized supply. Strategic collaboration among producers helps optimize costs, while regional concentration supports competitive strategies for expansion and market resilience.

Brand and Channel Strategies
Producers of direct reduced iron emphasize strong brand positioning through reliable supply networks and performance guarantees. Distribution channels focus on long-term partnerships with steel plants, ensuring consistent demand percentages (%). Competitive strategies include leveraging alliances with global traders and integrating forward into steel production, which strengthens overall brand visibility and growth potential.

Innovation Drivers and Technological Advancements
Technological advancements play a crucial role in shaping the market’s competitiveness. Companies are investing in hydrogen-based production methods, targeting lower emissions by a significant percentage (%). Innovation-driven strategies highlight energy efficiency and automation. Strong R&D collaboration with equipment manufacturers and institutes enhances process reliability, enabling expansion into sustainable DRI production methods.

Regional Momentum and Expansion
Market participants are driving expansion strategies by strengthening regional production hubs. In key geographies, partnerships with steelmakers account for substantial percentages (%) of capacity growth. Regional collaboration enables supply stability and accelerates infrastructure development. This momentum supports competitive differentiation, as firms balance domestic supply needs with export-oriented strategies to capture emerging demand.

Future Outlook
The future outlook emphasizes sustainable growth through cleaner technologies and diversified supply chains. Increasing adoption of eco-friendly production methods is expected to expand market penetration by notable percentages (%). Long-term strategies focus on strategic partnerships, technological innovation, and capacity expansion, positioning leading players to achieve stronger competitiveness in the evolving direct reduced iron industry.

Key players in Direct Reduced Iron (Dri) Market include:

• Qatar Steel
• Kobe Steel Ltd
• ArcelorMittal
• NUCOR
• Midrex Technologies Inc.
• Khouzestan Steel Company
• Welspun Group
• Jindal Shadeed Iron & Steel LLC
• AM/NS India
• Tosyali Algeria A.S.
• Cleveland-Cliffs Inc.
• SMS Group GmbH
• Voestalpine AG
• JSW Steel Ltd
• Tenova SpA

In this report, the profile of each market player provides following information:

• Market Share Analysis
• Company Overview and Product Portfolio
• Key Developments
• Financial Overview
• Strategies
• Company SWOT Analysis