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Iron Ore Pellets Market is Expanding at 4.1% CAGR: Rising Steel Demand & Technological Advancements Driving Growth

07-23-2025 01:29 PM CET | Chemicals & Materials

Press release from: Fact.MR

Iron Ore Pellets Market is Expanding at 4.1% CAGR: Rising Steel

The global iron ore pellets market was valued at USD 52.35 billion in 2023 and is poised to reach USD 78.24 billion by 2033, expanding steadily at a CAGR of 4.1% during the forecast period. This growth is driven by the increasing demand for steel across various sectors, coupled with technological advancements in the pelletizing process. Iron ore pellets are crucial in the production of steel, primarily used in blast furnaces and electric arc furnaces. Their uniform size and high iron content make them a preferred input in steel manufacturing.

Rising Demand Due to Advancements and Steel Industry Expansion

The rising consumption of magnetite-based iron ore pellets, which are expected to grow at a CAGR of 4.3%, is a key growth driver. Magnetite ores exhibit excellent magnetic properties that simplify the steelmaking process and offer high iron content. The adoption of iron ore pellets is being propelled by growing steel production capacities, especially in emerging markets. Additionally, pelletizing is more environmentally friendly compared to sintering, making pellets an increasingly attractive alternative amid stringent environmental norms.

The growing usage of steel in automotive manufacturing, residential and commercial construction, infrastructure development, and industrial machinery is also contributing to this upward trend. Moreover, iron ore pellets are demonstrating better performance characteristics than sinters and lumps, encouraging their broader adoption globally.

Browse for Full Report: https://www.factmr.com/report/iron-ore-pellets-market

Regional Insights: Growth Across Key Economies

United States: The U.S. market is projected to grow at 4.4% CAGR, driven by increased electric vehicle production, resurgence in aircraft manufacturing, and a shift towards decarbonized steelmaking.

United Kingdom: Valued at USD 6.07 billion in 2023, the UK market benefits from increasing construction activities and growing demand for structural steel, along with expansion in pelletizing plants.

Japan: The market in Japan is forecast to grow at 5.3% CAGR, reaching USD 6.96 billion by 2033, fueled by rapid steel production growth and robust infrastructure.

South Korea: Estimated to hit USD 3.67 billion by 2033, South Korea's market is boosted by industrial expansion, crude steel production, and policies discouraging sintering practices.

Market Segmentation & Leading Categories

By Grade:
Blast Furnace (BF) pellets dominate with a 61% market share, preferred for their cost-efficiency and extensive usage in integrated steel plants.
Direct Reduction (DR) pellets are also gaining popularity but are costlier in comparison.

By Source:
Magnetite ores hold a commanding 39% market share, favored for their high iron content and superior magnetic properties.

Hematite and other sources contribute to the remaining market but face limitations in quality and processing ease.
Application & End Use Dynamics

Steel production remains the largest application area, with iron ore pellets being a fundamental input for different types of furnaces such as electric induction, oxygen-based/blast furnaces, and electric arc furnaces. Additionally, iron-based chemicals constitute a niche but growing application segment.

Key Players and Competitive Landscape

The global iron ore pellets market features intense competition among established companies focused on enhancing production quality, expanding supply chain efficiencies, and forming strategic alliances with steelmakers.

Major companies include:

Vale
Rio Tinto
ArcelorMittal S.A.
Mitsubishi Corporation
Jindal SAW Ltd.
Cleveland-Cliffs
BHP Billiton
Fortescue Metals Group
Bahrain Steel
Xindia Steels Ltd.

In 2020, Rio Tinto reinforced its position by optimizing iron ore pricing structures to benefit steel manufacturers. Similarly, United States Steel Corporation entered a four-year supply agreement with Algoma Steel Inc., highlighting strong demand for premium-grade pellets.

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Driving Forces Behind Market Growth

A critical factor accelerating market expansion is the limited availability of high-grade lump ore, pushing steel producers to adopt pellets as a cleaner and more efficient substitute. Additionally, the growing momentum for low-carbon steel production is boosting innovation in hydrogen-based iron ore reduction technologies. Start-ups like Origen Hydrogen are pioneering AEM electrolyzers, facilitating carbon-neutral steelmaking by replacing carbon-based fuels with hydrogen.

The additive manufacturing (AM) sector also presents new growth avenues. AM technologies like laser sintering and metal 3D printing enable resource-efficient steel component production, increasing the appeal of iron ore pellets as raw material inputs.

Challenges Impacting Market Growth

Despite robust demand, the market is not without challenges. Fluctuating raw material prices, operational accidents, and the lack of vertical integration between pellet producers and steelmakers create uncertainties in supply and pricing. These factors can hamper market momentum in certain regions and limit profit margins for producers.

The global iron ore pellets market is on a growth trajectory fueled by increasing steel demand, technological innovation, and environmental regulations. With consistent performance advantages over traditional sinters and lumps, iron ore pellets are poised to play a pivotal role in next-generation steel manufacturing. Regional markets like Japan, the U.S., and South Korea offer lucrative growth opportunities, while innovations in hydrogen-based technologies and additive manufacturing signal a more sustainable future for the industry.

Check out More Related Studies Published by Fact.MR Research:

Automotive Compressors Market: https://www.factmr.com/report/3357/automotive-compressors-market

6-Azauracil Market: https://www.factmr.com/report/3365/6-azauracil-market

Phenanthroline Monohydrate Market: https://www.factmr.com/report/3374/phenanthroline-monohydrate-market

Contact:
US Sales Office:
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Suite 400
Rockville, MD 20852
United States
Tel: +1 (628) 251-1583
Sales Team : sales@factmr.com

About Us:

Fact.MR is a distinguished market research company renowned for its comprehensive market reports and invaluable business insights. As a prominent player in business intelligence, we deliver deep analysis, uncovering market trends, growth paths, and competitive landscapes. Renowned for its commitment to accuracy and reliability, we empower businesses with crucial data and strategic recommendations, facilitating informed decision-making and enhancing market positioning.

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