Direct Reduced Iron Market Analysis

Direct Reduced Iron Market Analysis

Based on product type, the market is categorized into hot briquetted iron and cold direct reduced iron. Cold direct reduced iron (CDRI) dominated the market with a share of 76% in 2023 and is expected to reach around USD 110.2 billion by 2032. This growth can be attributed to the increasing environmental restrictions aimed at decreasing carbon emissions and improving air quality. This has prompted steelmakers to adopt cleaner production methods, boosting demand for CDRI, which emits fewer greenhouse gases than typical blast furnace ironmaking.

Based on technology, the direct reduced iron market is segmented into gas-based and coal-based. The coal-based segment was valued at around USD 53.6 billion in 2023 and is expected to grow at a CAGR of 9.3% from 2024 to 2032. Coal-based solutions provide resistance to gas price fluctuation and can be more practical in areas with large coal supplies. Furthermore, while coal-based DRI procedures have advantages in areas with low coal prices or limited availability of natural gas, gas-based techniques are frequently favored due to their reduced total running costs and environmental benefits.
 

Based on application, the market is segmented into electric arc furnace, basic oxygen furnace, foundries, and others. The basic oxygen furnace segment was valued at around USD 33.4 billion in 2023 and is expected to grow at a CAGR of 8.3% from 2024 to 2032. DRI demand in basic oxygen furnace steelmaking is driven by factors such as steel demand patterns, raw material availability, and emission & sustainability regulations. Basic oxygen furnace steelmaking supports efforts to reduce carbon emissions and improve environmental performance in the steel sector. However, direct reduced iron serves applications beyond the steelmaking and foundry industries including iron & steel powder manufacturing, DRI briquetting, iron ore pelletizing, and other industrial processes.
 

The Middle East & Africa dominated the market for direct reduced iron with a share of 39.3% in 2023 and is expected to grow at a robust CAGR of 6.1% during the forecast period. The Middle East & Africa market holds strategic importance in the global steel industry owing to the region’s vast natural resources and emphasis on technological innovation and market development. Continuous investments in technological advancements and infrastructural development fuel the regional direct reduced iron (DRI) market forward. The manufacturing sector in the Middle East & Africa is projected to reach USD 2.3 trillion by 2030. This growth creates a demand for steel, potentially boosting the adoption of direct reduced iron as a raw material.
 

Furthermore, the MEA region is rich in natural gas and coal resources, which are used as significant feedstocks for DRI manufacturing. Countries with substantial reserves include Saudi Arabia, Qatar, Iran, and South Africa, making the area an essential player in the global direct reduced iron (DRI) industry. 
 

In terms of country, the U.S. dominated the North America market with a share of near about 77% in 2023. The steel business in the U.S. is thriving due to high demand from industries such as construction, automotive, and infrastructure. Direct reduced iron is an important feedstock in steelmaking, especially in EAFs. The increasing demand for steel in the country adds to the region's high need for direct reduced iron.
 

Russia led the Europe direct reduced iron (DRI) market, accounting for a share of about 63% in 2023. The regional growth can be attributed to several key factors such as an abundance of natural resources and a strong steel industry, which accounts for a considerable portion of Europe's production capacity. As direct reduced iron is an important feedstock for steelmaking, especially in EAFs, the high demand for steel in Europe propels product penetration. Russia is positioned as a prominent producer that provides a consistent supply of these important resources to European steelmakers.