Authors:
Kiran Pulidindi, Kavita Yadav
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Direct Reduced Iron Market Size & Share 2026-2035
Report ID: GMI6398
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Published Date: October 2026
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Direct Reduced Iron (DRI) Market Size
The direct reduced iron (DRI) market was valued at USD 47 billion in 2025, is expected to reach USD 52.1 billion in 2026, and is projected to grow at a 10.4% CAGR (2026–2035) to reach USD 126.7 billion in 2035. The market comprises solid-state reduced iron products, including cold direct reduced iron (CDRI), hot direct reduced iron (HDRI), and hot briquetted iron (HBI), consumed in downstream steelmaking and metallurgical operations.
Direct Reduced Iron Market Key Takeaways
Market Leader: Mobarakeh Steel Company led with over 6% market share in 2025.
Leading Players: Top 5 players in this market include Mobarakeh Steel Company, JSW Steel Limited, Khouzestan Steel Company, Jindal Steel and Power Limited, Emirates Steel Arkan, which collectively held a market share of 21.2% in 2025.
The direct reduced iron market's approximately USD 320 per metric ton blended selling price in 2025 reflected a correction in iron-unit pricing after the commodity peak, while demand continued to be underpinned by EAF charge requirements, captive DRI-EAF integration, and the need for controlled metallic inputs. The market's evolution increasingly depends on the split between cost-oriented coal-based supply and higher-value gas- and hydrogen-based products capable of serving certified low-carbon steel supply chains.
GMI Analyst View
Based on our discussions with industry stakeholders and independent volume triangulation, the direct reduced iron market consumed approximately 147.0 million metric tons globally in 2025. This scale of DRI integration into steelmaking metallics supply indicates that underlying demand is stronger than base-year revenue alone suggests, positioning the market for revenue recovery as price normalization and green-steel premiums gain traction.
Direct Reduced Iron (DRI) Market Trends, Growth Drivers & GMI Forecast Outlook
The Direct Reduced Iron (DRI) Market is moving from an iron-unit supply market toward a differentiated metallics market shaped by EAF capacity additions, carbon-accounting requirements, and the commercial emergence of hydrogen-ready supply. Demand growth is broad-based, but revenue expansion increasingly depends on the ability to monetize verifiable lower-carbon DRI.
Key Drivers
Evidence anchors use cited external data; demand implications and forecast conditions represent GMI analysis.
EAF investment changes the quality and provenance requirements placed on metallic charge supply. Scrap remains indispensable, but its residual profile can limit production of high-grade flat steel and specialized products. DRI gives producers a controllable complement to scrap, particularly where new melt shops are designed around high-quality steel, certified lower-carbon output, or integrated hot-charge configurations.
CBAM adds a commercial filter to this transition. The mechanism gives steel buyers, producers, and importers a stronger incentive to distinguish between iron units based on embedded emissions and traceability rather than only delivered cost. This shifts DRI from a production input into a component of procurement strategy, especially for European mills and suppliers serving automotive, infrastructure, and industrial customers with documented emissions requirements.
The third driver is the gradual conversion of announced hydrogen-ready assets into contract-backed industrial capacity. Long-term offtake arrangements reduce the exposure of project sponsors to uncommitted demand and can support investment before hydrogen reaches broad cost parity with natural gas. The resulting premium DRI market will develop unevenly, but it creates a route for producers to capture value beyond conventional commodity metallics pricing.
Key Restraints
Evidence anchors use cited external data; demand implications and forecast conditions represent GMI analysis.
Coal-based DRI remains fundamental to supply availability and steel affordability in India, but it is less naturally aligned with emerging premium export requirements. This creates a two-tier market: domestically consumed coal-based sponge iron serves cost-sensitive secondary steel production, while gas- and hydrogen-based producers are better positioned to participate in traceable lower-carbon trade flows. The distinction matters because it limits how quickly global revenue can reflect volume growth.
Existing BF-BOF assets also make steel-route transition an investment-timing issue rather than a purely technical choice. Mills must weigh remaining furnace life, reline schedules, access to low-cost electricity, scrap availability, and financing support before replacing integrated routes. DRI demand therefore rises first where EAF investments are newly built, where furnaces are being replaced, or where carbon-cost exposure changes the economics of existing capacity.
Pellet availability introduces a separate physical constraint. Producers without secure access to suitable iron ore feed can face both operating-risk exposure and margin volatility, even when downstream DRI demand is robust. This favors established production hubs with integrated raw-material logistics, established gas infrastructure, and proven furnace operating expertise.
GMI Analyst View
We view the central forecast question as the pace at which lower-carbon iron units become commercially differentiated rather than whether DRI remains relevant to steelmaking. EAF capacity creates the demand base, but hydrogen availability, carbon-accounting rules, and pellet security determine how much of that demand converts into premium revenue.
Direct Reduced Iron (DRI) Market Segment Analysis
By Form
Cold Direct Reduced Iron (CDRI)
CDRI accounted for a 67.0% revenue share in 2025 and is projected to generate USD 69.7 billion in 2035. CDRI remains the broadest form category because it fits both captive steelmaking and merchant supply systems. Its role is particularly durable in coal-based sponge-iron markets and gas-based facilities that serve nearby melt shops, although its mix will face pressure from formats better suited to long-distance transport and premium low-carbon supply chains.
Hot Direct Reduced Iron (HDRI)
HDRI generated USD 7.1 billion in 2025 and is projected to reach USD 22.8 billion in 2035. HDRI's advantage rests on direct transfer from the shaft furnace to the melt shop, reducing the need to cool, store, and reheat the product. This favors integrated plants where furnace proximity, stable operating schedules, and EAF productivity support captive use rather than merchant trading.
Hot Briquetted Iron (HBI)
HBI represented a 17.9% revenue share in 2025 and is forecast to expand at a 15.4% CAGR (2026–2035). HBI is strategically important because briquetting improves product stability and makes DRI more suitable for ocean freight and interregional trade. The format is well positioned to connect gas- and hydrogen-based producing hubs with EAF markets that lack domestic DRI capacity, particularly as buyers seek certified lower-carbon metallic inputs.
By Production Process
Gas-Based MIDREX
Gas-Based MIDREX held a 54.9% revenue share in 2025 and is expected to generate USD 57.0 billion in 2035. MIDREX remains the core installed technology platform across many established DRI regions, and its relevance extends into transition projects because flexible shaft-furnace designs can support an evolving reducing-gas mix. Its leadership is therefore more likely to be reshaped by feedstock evolution than displaced by a wholly separate process family.
Gas-Based Energiron/HYL
Gas-Based Energiron/HYL generated USD 5.6 billion in 2025 and is projected to grow at a 10.3% CAGR (2026–2035). Energiron/HYL provides an established route for producers seeking gas-based DRI with process configurations that can support carbon-management strategies. Its commercial role is strongest in gas-rich integrated complexes where DRI quality, operational continuity, and downstream melt-shop integration are more important than merchant-market flexibility.
Gas-Based Other Shaft Furnace
Gas-Based Other Shaft Furnace processes generated USD 1.4 billion in 2025 and are projected to reach USD 3.8 billion in 2035. Other shaft-furnace configurations retain relevance in localized production systems where proprietary plant designs, legacy equipment, or site-specific feedstock arrangements shape the technology choice. Their growth is expected to remain selective rather than system-defining, reflecting the installed-base advantage of the dominant licensors.
Hydrogen-Based DRI
Hydrogen-Based DRI generated USD 0.2 billion in 2025 and is projected to reach USD 12.7 billion in 2035. Hydrogen-based production is becoming the principal route through which DRI can command a material decarbonization premium. Its scale-up depends on low-carbon power, electrolyzer deployment, hydrogen transport and storage, and credible offtake demand, making execution quality as important as technology selection.
Coal-Based Rotary Kiln (India Sponge Iron)
Coal-Based Rotary Kiln production accounted for a 28.7% revenue share in 2025 and is forecast to grow at a 9.5% CAGR (2026–2035). Rotary-kiln sponge iron retains a strong position in India because it is linked to established domestic fuel, ore, and secondary steelmaking networks. The process remains cost competitive for local consumption, but its long-term value capture is increasingly limited by the carbon-intensity requirements attached to premium international steel supply chains.
Coal-Based Gasification/Syngas Shaft
Coal-Based Gasification/Syngas Shaft processes are expected to grow at an 18.9% CAGR (2026–2035) and reach a 3.0% revenue share in 2035. This route can act as a transitional option in markets where hydrogen and natural-gas infrastructure are not yet sufficiently developed. Its strategic importance lies in creating a bridge toward more flexible gas-based reduction, although its environmental and investment rationale will remain sensitive to policy direction and feedstock availability.
By Application
Electric Arc Furnace (EAF) Steelmaking
EAF steelmaking represented a 78.1% revenue share in 2025 and is projected to generate USD 103.9 billion in 2035. The Direct Reduced Iron (DRI) Market is fundamentally anchored in EAF steelmaking because DRI provides controlled chemistry, low residual content, and reliable metallic yield. Its role grows most quickly where producers need to lift scrap quality, make demanding steel grades, or document the carbon profile of their metallic charge mix.
BOF/BF Charge Enrichment
BOF/BF charge enrichment generated USD 5.2 billion in 2025 and is projected to grow at an 8.0% CAGR (2026–2035). HBI and related DRI products can improve metallic yield and operational flexibility in integrated steelmaking routes. However, this application faces a more constrained growth profile because it is tied to the installed BF-BOF base rather than the expanding EAF investment cycle.
Foundry & Induction Furnace
Foundry and induction-furnace applications accounted for an 8.9% revenue share in 2025 and are projected to generate USD 8.9 billion in 2035. This application depends heavily on localized secondary steelmaking economics, particularly where sponge iron is used to manage metallic quality and reduce reliance on volatile scrap availability. Demand is therefore resilient in selected domestic markets but less exposed to premium international DRI trade.
Others
Other applications generated USD 0.9 billion in 2025 and are forecast to grow at a 10.7% CAGR (2026–2035). Niche metallurgical uses provide an additional outlet for DRI beyond primary steel production. Their contribution is comparatively small, but they can benefit from specialized requirements for reductants, chemistry control, and non-standard melt-shop configurations.
By End Use
Construction & Infrastructure
Construction and infrastructure represented a 42.0% revenue share in 2025 and are forecast to grow at a 9.8% CAGR (2026–2035). Infrastructure investment sustains DRI demand through long-steel consumption in rebar, sections, wire rod, transport networks, and urban development. This end use is volume intensive, although its price realization varies by the DRI route and local steelmaking configuration supporting the final product.
Automotive
Automotive generated USD 7.1 billion in 2025 and is projected to reach USD 17.7 billion in 2035. Automotive customers increasingly value steel with consistent metallurgy and credible emissions documentation. DRI-EAF routes can support both needs, especially for high-strength steels used in vehicle structures and electrification-related manufacturing, making automotive an important premium-demand channel.
Machinery & Equipment
Machinery and equipment accounted for a 14.0% revenue share in 2025 and are projected to generate USD 15.2 billion in 2035. This end use draws on a broad range of engineering steels for construction equipment, agricultural machinery, industrial systems, and mining assets. Procurement requirements are progressively extending beyond performance and cost toward traceability, favoring steel producers that can manage metallic-input quality and carbon disclosure.
Electrical & Electronics
Electrical and electronics are forecast to grow at a 12.8% CAGR (2026–2035) and represent an 11.0% revenue share in 2035. Demand for electrical steels and tightly specified grades supports the use of controlled metallic inputs in the steelmaking process. Growth in grid equipment, electrified transport, and power infrastructure strengthens the relevance of DRI where melt-shop chemistry needs to be managed more closely than with variable scrap blends.
Renewable Energy
Renewable energy generated USD 2.8 billion in 2025 and is projected to expand at a 17.0% CAGR (2026–2035). Renewable-energy infrastructure requires substantial volumes of high-quality steel in towers, nacelles, mounting structures, and transmission systems. The alignment between lower-carbon steel inputs and the sustainability commitments of renewable-energy developers creates a particularly favorable channel for hydrogen-based and certified DRI-derived steel.
Others
Other end uses represented a 14.0% revenue share in 2025 and are projected to represent a 13.0% revenue share in 2035. Aerospace, shipbuilding, pipe and tube, and defense applications maintain demand for specialized steel grades and controlled metallic inputs. Their combined market position remains comparatively stable, with purchasing decisions often influenced by qualification requirements, supply assurance, and grade consistency rather than volume alone.
GMI Analyst View
We see the most consequential segment shift occurring where product form, process route, and end-use requirements intersect. HBI improves the ability to move premium DRI across borders, while hydrogen-based production improves its commercial distinction; together, they create a higher-value supply proposition for EAF operators and low-carbon steel buyers.
Direct Reduced Iron (DRI) Market Regional Analysis
North America Direct Reduced Iron (DRI) Market Analysis
North America accounted for a 5.1% revenue share in 2025 and is projected to generate USD 5.4 billion in 2035. The Direct Reduced Iron (DRI) Market in North America is centered on gas-based production and captive EAF consumption. Producers prioritize supply security and metallic quality as they manage exposure to scrap-market volatility, while future investment decisions will depend on the economics of hydrogen readiness, natural-gas availability, and demand for low-carbon steel.
United States (US)
The United States generated USD 2.1 billion in 2025 and is projected to account for 87.0% of North American revenue in 2035. The United States remains the regional operating center for integrated DRI-EAF production, supported by established mini-mill demand and dedicated DRI and HBI assets. Its market development is shaped by the ability of producers to match long-term low-carbon investment with reliable energy and iron-ore supply.
Canada
Canada accounted for a 12.5% share of North American revenue in 2025 and is forecast to grow at a 9.9% CAGR (2026–2035). Canada is more exposed to merchant HBI consumption and cross-border steelmaking linkages than to domestic DRI production. Access to North American mini-mill clusters and Atlantic trade routes gives the country a role as a demand market for transported metallics.
Europe Direct Reduced Iron (DRI) Market Analysis
Europe is projected to grow at a 30.1% CAGR (2026–2035) and account for a 5.9% global revenue share in 2035. Europe's Direct Reduced Iron (DRI) Market is developing from a limited commercial base as steelmakers pursue carbon-compliant replacement capacity, lower-emissions metallic inputs, and hydrogen-ready process configurations. The region's growth rate reflects both emerging project deployment and its low starting point, while execution remains linked to electricity, hydrogen, and permitting conditions.
Germany
Germany represented a 12.5% share of European revenue in 2025 and is projected to generate USD 2.8 billion in 2035. Germany is positioned to become a major European H2-DRI center as large steel producers convert established industrial sites toward hydrogen-ready production. Its scale potential is supported by the need to decarbonize major flat-steel operations, although project timelines remain contingent on energy infrastructure and policy support.
Italy
Italy accounted for a 5.0% share of European revenue in 2025 and is projected to generate USD 0.5 billion in 2035. Italy's EAF-intensive steel sector creates a natural demand base for HBI and other merchant DRI products. The market's opportunity is primarily consumption-led, reflecting the need for high-quality metallics rather than an immediate domestic supply buildout.
United Kingdom (UK)
The United Kingdom is projected to grow at an approximately 26% CAGR (2026–2035) and account for a 4.0% share of European revenue in 2035. The United Kingdom's opportunity is linked to the restructuring of legacy integrated steel capacity and the growing role of EAF-based production. Imported HBI and emerging lower-carbon metallic supply are likely to remain important during the transition.
France
France is projected to grow at an approximately 34% CAGR (2026–2035) and generate USD 0.4 billion in 2035. France's prospective DRI demand is tied to the development of hydrogen-based projects and decarbonization activity at coastal industrial sites. The market remains project dependent, with commercial expansion contingent on execution of planned hydrogen and steelmaking infrastructure.
Rest of Europe
Rest of Europe represented a 75.0% share of European revenue in 2025 and is projected to generate USD 3.5 billion in 2035. Scandinavian and Austrian projects give the rest of Europe an outsized role in early commercial H2-DRI deployment. These markets combine access to renewable-power resources, industrial policy support, and proximity to European buyers seeking verifiable green-steel inputs.
Asia Pacific Direct Reduced Iron (DRI) Market Analysis
Asia Pacific generated USD 18.9 billion in 2025 and is projected to reach USD 45.5 billion in 2035. The Direct Reduced Iron (DRI) Market in Asia Pacific is defined by two distinct models: India's large coal-based sponge-iron ecosystem and the region's longer-term shift toward gas- and hydrogen-based DRI in markets pursuing steel decarbonization. The coexistence of these models supports volume growth but produces wide variation in production economics and carbon intensity.
India
India generated USD 16.9 billion in 2025 and is projected to reach USD 31.1 billion in 2035. India remains the region's volume anchor because its fragmented sponge-iron sector serves extensive induction-furnace and secondary steelmaking demand. Coal-based DRI provides a practical scrap substitute for domestic producers, although its exposure to carbon-based trade barriers limits access to the highest-value export-oriented supply chains.
China
China accounted for a 3.2% share of Asia Pacific revenue in 2025 and is forecast to grow at an approximately 30% CAGR (2026–2035). China's DRI market is emerging alongside EAF investment and industrial decarbonization priorities. Its growth potential is considerable, but it depends on the pace at which gas, hydrogen, and suitable iron-ore supply can be aligned with the country's enormous but historically BF-BOF-oriented steel base.
Japan
Japan generated USD 0.1 billion in 2025 and is projected to grow at a 13.0% CAGR (2026–2035). Japan's DRI demand is likely to be supported by imported metallics and selective hydrogen-based initiatives. The country's advanced steel sector creates demand for high-quality inputs, but domestic DRI capacity expansion remains comparatively measured.
South Korea
South Korea accounted for a 0.5% share of Asia Pacific revenue in 2025 and is projected to generate USD 0.3 billion in 2035. South Korea's opportunity is connected to EAF expansion and the pursuit of lower-carbon steel production. Demand development will depend on the availability of competitively sourced DRI and the integration of new metallics strategies into existing steelmaking operations.
Rest of Asia Pacific
Rest of Asia Pacific generated USD 1.2 billion in 2025 and is projected to reach USD 4.3 billion in 2035. The rest of Asia Pacific combines growing merchant DRI demand in Southeast Asian EAF markets with selective additions of gas-based capacity. Import logistics, scrap availability, and local power economics will determine how rapidly individual markets adopt DRI as a higher-quality metallics input.
Latin America Direct Reduced Iron (DRI) Market Analysis
Latin America represented an 8.9% share of global revenue in 2025 and is forecast to grow at a 6.6% CAGR (2026–2035). The Direct Reduced Iron (DRI) Market in Latin America is supported by an established gas-based production base, particularly in Mexico and Venezuela. Its slower growth profile reflects market maturity rather than weak industrial relevance, with existing facilities continuing to serve both regional steelmaking and international HBI trade.
Brazil
Brazil generated USD 0.5 billion in 2025 and is projected to grow at a 13.8% CAGR (2026–2035). Brazil's DRI demand is linked to EAF investment and the broader modernization of domestic steel capacity. The country has potential to increase DRI use where producers seek to strengthen metallic quality and reduce dependence on imported scrap.
Argentina
Argentina accounted for a 9.5% share of Latin American revenue in 2025 and is projected to generate USD 0.6 billion in 2035. Argentina's market is tied to established tubular and flat-steel operations, where DRI supports consistent metallic-input supply. Expansion is expected to remain measured, reflecting limited greenfield development relative to larger regional producers.
Rest of Latin America
Rest of Latin America generated USD 3.3 billion in 2025 and is projected to reach USD 5.8 billion in 2035. Mexico, Trinidad, and Venezuela remain important to regional supply because of long-standing gas-based DRI and HBI operations. Their strategic value extends beyond domestic consumption, particularly where merchant supply can serve EAF markets in North America and Europe.
Middle East & Africa Direct Reduced Iron (DRI) Market Analysis
Middle East & Africa represented a 44.9% revenue share in 2025 and is projected to generate USD 60.3 billion in 2035. The Direct Reduced Iron (DRI) Market in Middle East & Africa benefits from low-cost natural gas, established shaft-furnace expertise, and highly integrated DRI-EAF complexes. These advantages support the region's position as the leading global supply center while creating a foundation for future hydrogen-ready and green-HBI investment.
Saudi Arabia
Saudi Arabia generated USD 3.0 billion in 2025 and is forecast to grow at a 12.2% CAGR (2026–2035). Saudi Arabia's DRI sector is supported by integrated steel capacity and national industrial investment priorities. Its longer-term opportunity lies in combining existing gas-based advantages with hydrogen-ready expansion aimed at serving domestic demand and export-oriented low-carbon steel markets.
UAE
The UAE accounted for a 6.6% share of Middle East & Africa revenue in 2025 and is projected to generate USD 3.8 billion in 2035. The UAE's integrated DRI-EAF operations provide a strong platform for process optimization and lower-carbon product development. The market is well positioned to benefit from industrial decarbonization investments, particularly where operational improvements can be integrated without replacing the full production chain.
South Africa
South Africa is forecast to grow at a 16.6% CAGR (2026–2035) and generate USD 0.8 billion in 2035. South Africa's growth outlook is associated with the need to strengthen metallic-input security for EAF-based steelmaking. Progress will depend on investment conditions, power reliability, and the competitiveness of domestic DRI production relative to scrap imports.
Rest of Middle East & Africa
Rest of Middle East & Africa generated USD 16.5 billion in 2025 and is projected to reach USD 46.7 billion in 2035. Iran, Algeria, Egypt, Qatar, and Oman form a substantial multi-country DRI production base, supported by gas availability and established integrated steel complexes. This group will remain pivotal to global DRI supply, although trade access and carbon-accounting requirements will increasingly influence the value realized by individual producers.
GMI Analyst View
We believe Middle East & Africa holds the strongest structural position because it combines existing gas-based production economics with a plausible route into premium lower-carbon exports. The region's strategic challenge is to convert that production advantage into traceable, hydrogen-ready supply before competing hubs establish comparable trade relationships with European and Asian EAF customers.
Direct Reduced Iron (DRI) Market Share & Competitive Landscape
The Direct Reduced Iron (DRI) Market share structure remains fragmented, with the top five producers collectively holding approximately 21.2% of global revenue in 2025. Market concentration is limited by the scale of India's dispersed sponge-iron industry, the importance of captive gas-based operations across the Middle East, and the geographic spread of integrated DRI-EAF production across multiple regions.
Mobarakeh Steel Company
Mobarakeh Steel Company held a 6.0% global market share in 2025. Mobarakeh's competitive strength stems from scale, integrated steelmaking operations, and access to a mature Iranian DRI ecosystem. Its captive DRI position supports stable metallic supply for downstream production and gives the company a cost and quality advantage in regional steel markets.
JSW Steel Limited
JSW Steel Limited held a 5.3% global market share in 2025. JSW benefits from a diversified DRI portfolio spanning coal- and gas-based operations, enabling it to manage feedstock and regional market exposure. Its competitive position is reinforced by its integration with downstream steel capacity and its ability to adapt investment toward higher-value, lower-emissions production routes over time.
Khouzestan Steel Company
Khouzestan Steel Company held a 3.8% global market share in 2025. Khouzestan operates within Iran's established DRI-EAF production cluster, where proximity to gas supply and connected downstream capacity support operational integration. Its market relevance derives from captive consumption, regional scale, and participation in a supply base that remains important to global DRI trade.
Jindal Steel and Power Limited and Emirates Steel Arkan
Jindal Steel and Power Limited and Emirates Steel Arkan contribute to the leading-producer group through integrated capacity, downstream steelmaking linkages, and ongoing modernization activity.
Competitive intensity is increasingly defined by more than tonnage. Producers with reliable DR-grade feedstock, gas access, captive EAF demand, logistics capability, and a credible emissions-reduction pathway are better positioned to defend margins. Technology providers such as Midrex Technologies and Kobe Steel influence this transition through process licensing and hydrogen-ready technology deployment, even though they are not included in producer revenue market-share calculations.
Recent Industry Developments
Danieli, Kanthal, and EMSTEEL launched an industrial-scale electric process-gas-heating pilot at EMSTEEL's Abu Dhabi DRI plant in September 2025. The initiative applies electric heating to a process stage traditionally served by gas combustion and is intended to reduce direct emissions within an existing Energiron-based operation. The development illustrates an incremental decarbonization route for incumbent gas-based DRI facilities, allowing operators to reduce emissions intensity without waiting for full hydrogen conversion or complete shaft-furnace replacement [4]Association for Iron & Steel Technology. “Danieli, Kanthal and EMSTEEL Launch Pilot Project for Electric Process Gas Heating.” aist.org.
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