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Direct Reduced Iron Market Forecasted to Climb to US$72.9 Bn by 2031 - Persistence Market Research

03-30-2025 07:58 PM CET | Chemicals & Materials

Press release from: Persistence Market Research

Direct Reduced Iron Market

Direct Reduced Iron Market

The direct reduced iron (DRI) market is undergoing significant growth, driven by increased demand for steel production across the globe. DRI, also known as sponge iron, is produced by reducing iron ore using a reducing gas, which is primarily composed of hydrogen and carbon monoxide. This process eliminates the need for coke and blast furnaces, making it a cleaner alternative for iron and steel production. As global infrastructure development accelerates, the demand for steel has surged, and DRI plays a vital role in meeting this demand, especially in countries focusing on reducing emissions from traditional steel-making processes. According to Persistence Market Research, the global DRI market is set to grow at a compound annual growth rate (CAGR) of 8.2%, increasing from US$42.1 billion in 2024 to US$72.9 billion by 2031.

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Key growth drivers for this market include the need for sustainable production methods, rising urbanization, and the growing demand for steel in construction and automotive industries. The increasing adoption of electric arc furnaces (EAF) that utilize DRI as a raw material for steel manufacturing has been another significant factor pushing the market forward. The Asia-Pacific region, especially countries like China and India, dominates the DRI market due to their strong steel production sectors, robust industrial activities, and high consumption of iron and steel.

Key Highlights from the Report

• The direct reduced iron market is expected to grow at a CAGR of 8.2% between 2024 and 2031.
• The market is projected to increase from US$42.1 billion in 2024 to US$72.9 billion by 2031.
• Rising demand for steel in construction, automotive, and infrastructure sectors is a key driver.
• The Asia-Pacific region holds the largest market share, driven by countries like China and India.
• Adoption of electric arc furnaces (EAF) in steel production is boosting DRI consumption.
• The market is expected to witness significant advancements in DRI technology and production efficiency.

Market Segmentation

The direct reduced iron market is primarily segmented based on product type, end-users, and regional markets. Product-wise, the market is divided into hot briquetted iron (HBI), sponge iron, and other forms of DRI. Hot briquetted iron (HBI) is favored for its ease of transportation and storage, making it a preferred choice for global trading. Sponge iron, which is typically used in steel manufacturing, is another critical segment in the DRI market. These product types cater to the diverse needs of the iron and steel production industries worldwide.

In terms of end-users, the DRI market is segmented into sectors such as construction, automotive, machinery, and others. The construction and automotive industries represent the largest consumer segments due to the high demand for steel in infrastructure projects and automobile manufacturing. Furthermore, the demand for high-quality steel in manufacturing processes, such as machinery and equipment production, continues to grow, creating lucrative opportunities for DRI consumption across multiple sectors.

Regional Insights

The Asia-Pacific region is the largest market for direct reduced iron, with China and India leading the charge in steel production. Both countries have large-scale steel manufacturing plants and are investing heavily in infrastructure development, which requires substantial quantities of steel. Additionally, the region is actively adopting more sustainable and efficient production processes, which is further driving the demand for DRI.

North America and Europe also represent significant markets for DRI, primarily driven by the adoption of electric arc furnaces (EAF) and the transition to more environmentally friendly steel production methods. Both regions have been emphasizing the use of metal and DRI in EAFs to minimize carbon emissions and reduce dependence on blast furnaces, which contributes to the market growth in these regions.

Market Drivers

Several factors are driving the growth of the direct reduced iron market. The demand for high-quality steel in construction, automotive, and manufacturing industries remains strong, which is fueling the need for efficient and environmentally friendly production methods. As countries focus on reducing carbon emissions and improving sustainability, DRI is gaining popularity due to its lower carbon footprint compared to traditional blast furnace-based methods.

The growth of electric arc furnaces (EAF) also plays a critical role in boosting the DRI market. EAFs primarily use
metal and DRI as raw materials for steel production. As the demand for recycled steel rises and EAF technology continues to advance, DRI's role in global steel production becomes more important. This shift toward electric furnaces, combined with the continued growth in industrialization and urbanization, is expected to drive the market forward in the coming years.

Market Restraints

Despite the positive growth prospects, the direct reduced iron market faces several challenges. One of the primary restraints is the high cost of DRI production, particularly when compared to traditional blast furnace methods. The cost of natural gas, a key input in DRI production, remains volatile, which can make the process less economically viable in certain regions.

Additionally, the availability of iron ore, especially in regions that are heavily dependent on imports, poses another challenge for DRI production. Fluctuations in the global supply chain, caused by geopolitical tensions or disruptions in the mining industry, can lead to supply shortages, affecting the market's growth. These factors create uncertainties that may slow the pace of DRI adoption in certain parts of the world.

Market Opportunities

The direct reduced iron market is poised for significant opportunities driven by technological advancements and the growing demand for sustainable steel production. Innovations in DRI production methods, such as the use of hydrogen instead of carbon-based reducing agents, are opening up new avenues for reducing emissions further and making the process even more eco-friendly.

Additionally, the expansion of the electric arc furnace market offers substantial growth opportunities for DRI producers. As more steelmakers adopt EAF technology, the demand for DRI will continue to increase, particularly in emerging economies with rapidly growing steel industries. Furthermore, investments in infrastructure and construction projects in developing countries present a steady and long-term demand for steel, indirectly fueling the growth of the DRI market.

Frequently Asked Questions (FAQs)

• How Big is the Direct Reduced Iron Market?
• Who are the Key Players in the Global Direct Reduced Iron Market?
• What is the Projected Growth Rate of the Direct Reduced Iron Market?
• What is the Market Forecast for the Direct Reduced Iron Market by 2032?
• Which Region is Estimated to Dominate the Direct Reduced Iron Industry through the Forecast Period?

Company Insights

The direct reduced iron market is highly competitive, with several key players dominating the global landscape. These include:

• ArcelorMittal
• Harsco Corporation
• Nucor Corporation
• POSCO
• JSW Steel
• ThyssenKrupp Steel

Recent Developments

1. ArcelorMittal has recently announced plans to expand its DRI capacity in North America to meet growing demand for sustainable steel production.

2. POSCO is investing in hydrogen-based DRI production to reduce carbon emissions and enhance the eco-friendly profile of its steel products.

The direct reduced iron market is expected to continue expanding rapidly in the coming years, driven by technological advancements, increasing demand for steel, and the shift towards more sustainable production methods.

Contact Us:

Persistence Market Research
G04 Golden Mile House, Clayponds Lane
Brentford, London, TW8 0GU UK
USA Phone: +1 646-878-6329
UK Phone: +44 203-837-5656
Email: sales@persistencemarketresearch.com
Web: https://www.persistencemarketresearch.com

About Persistence Market Research:

At Persistence Market Research, we specialize in creating research studies that serve as strategic tools for driving business growth. Established as a proprietary firm in 2012, we have evolved into a registered company in England and Wales in 2023 under the name Persistence Research & Consultancy Services Ltd. With a solid foundation, we have completed over 3600 custom and syndicate market research projects, and delivered more than 2700 projects for other leading market research companies' clients.

Our approach combines traditional market research methods with modern tools to offer comprehensive research solutions. With a decade of experience, we pride ourselves on deriving actionable insights from data to help businesses stay ahead of the competition. Our client base spans multinational corporations, leading consulting firms, investment funds, and government departments. A significant portion of our sales comes from repeat clients, a testament to the value and trust we've built over the years.

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