Direct Reduced Iron Market : Powering the Next Era of Transformation

Market Outlook and Forecast

The Direct Reduced Iron (DRI) market is undergoing a significant transformation driven by the global steel industry's push toward decarbonization and sustainable manufacturing. As an alternative to traditional blast furnace processes, DRI has become a cornerstone in low-emission steel production, offering high-purity iron suitable for electric arc furnaces (EAFs).

In 2025, the Direct Reduced Iron market is valued at USD 64.61 billion, and it is projected to reach USD 146.08 billion by 2035, expanding at a compound annual growth rate (CAGR) of 8.5% from 2026 to 2035. This remarkable growth underscores the increasing adoption of DRI in integrated steelmaking, particularly as the sector embraces hydrogen-based reduction technologies.

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Regional Performance Highlights

The Asia Pacific region remains the dominant force in the global DRI market, accounting for approximately 51% share by 2035. Rapid industrialization, a growing focus on green steel, and investments in EAF-based production are key drivers across countries such as India, China, and Japan.

Europe, on the other hand, is witnessing strong momentum fueled by climate-neutral steelmaking goals. Major steel producers in Germany, Sweden, and the UK are investing heavily in hydrogen DRI plants, backed by EU decarbonization policies and funding. This regional shift toward clean ironmaking positions Europe as a critical innovator in sustainable DRI production.

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Market Segmentation

Forms Segment

The DRI market is segmented into lumps, pellets, and hot briquetted iron (HBI). Among these, HBI has emerged as a preferred form due to its ease of transportation, reduced reoxidation risk, and compatibility with global trade requirements. HBI is particularly favored by international steelmakers without local DRI facilities, enabling them to integrate high-quality feedstock into EAF operations.

Pellets continue to be the backbone of DRI production, driven by their consistent chemical composition and high metallization rates. Advancements in pelletization technologies and raw material optimization are further improving DRI quality and yield.

Production Process Segment

The gas-based DRI process dominates the market, leveraging natural gas as the primary reducing agent. It offers superior energy efficiency and lower carbon intensity compared to coal-based methods. However, the industry is now pivoting toward hydrogen-based reduction, aligning with global net-zero emission goals.

The coal-based DRI process remains relevant in regions with limited natural gas infrastructure, particularly in parts of India and China. Technological innovations are underway to reduce emissions from coal-based systems through carbon capture and improved thermal efficiency.

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Top Market Trends

1. Rise of Hydrogen-Based DRI for Green Steel Production

The most transformative trend shaping the Direct Reduced Iron market is the rapid shift toward hydrogen-based DRI. This approach replaces natural gas with renewable hydrogen as the reducing agent, drastically reducing carbon emissions from steelmaking.

Recent developments highlight this shift:

● SSAB, LKAB, and Vattenfall's HYBRIT project in Sweden achieved a breakthrough by producing fossil-free steel using hydrogen-based DRI.

● ArcelorMittal announced multiple hydrogen DRI initiatives across Europe, targeting large-scale deployment by 2030.

● JSW Steel in India is piloting hydrogen-based DRI units to align with the nation's Green Hydrogen Mission.

This transition positions DRI as the backbone of sustainable steel manufacturing, aligning industrial production with climate commitments.

2. Digitalization and Automation of DRI Operations

Automation and Industrial Internet of Things (IIoT) technologies are revolutionizing DRI plant operations. Digital twins, AI-driven process monitoring, and predictive maintenance systems are optimizing gas usage, temperature control, and metallization efficiency.

For instance, MIDREX Technologies has incorporated smart automation systems to ensure continuous production optimization and emission control. These advancements are enhancing plant productivity while minimizing operational costs and downtime.

3. Expanding Role of DRI in Circular Steelmaking

The steel industry's circular economy focus is accelerating DRI's integration with EAF operations. DRI compensates for the declining quality and availability of used metal, ensuring consistent production of high-grade steel.

As countries strengthen recycling regulations and move toward low-carbon manufacturing, DRI's role in supplementing steelmaking is becoming indispensable. Hybrid steelmaking routes that combine DRI and recycled material are now central to sustainable steel production strategies worldwide.

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Recent Company Developments

1. ArcelorMittal

ArcelorMittal has intensified its focus on green steel production through hydrogen DRI investments. The company recently announced the construction of a 2.5 million-tonne hydrogen-based DRI plant in Gijón, Spain, supported by EU Innovation Fund grants. In addition, ArcelorMittal's partnership with Enertrag and Stadtwerke Lübeck in Germany aims to establish a renewable hydrogen supply chain for steelmaking.

2. JSW Steel

JSW Steel, one of India's leading steel producers, unveiled plans to deploy green hydrogen-based DRI units in collaboration with global technology providers. The company's initiative aligns with India's National Green Hydrogen Mission and represents a major step toward decarbonizing its steelmaking process.

3. MIDREX Technologies

A pioneer in DRI technology, MIDREX Technologies continues to dominate the gas-based reduction segment. In the past year, the company launched new modular DRI plants integrating MIDREX FlexTM technology, capable of switching between natural gas and hydrogen feedstock. This flexibility allows producers to transition seamlessly toward green DRI as hydrogen availability scales up.

4. H2 Green Steel

Sweden-based H2 Green Steel has gained global attention with its fully integrated hydrogen-powered DRI steel plant in Boden, set to start production by 2026. The project has attracted significant investment from industrial giants such as Mercedes-Benz and Scania, signaling strong downstream demand for fossil-free steel.

5. Emirates Steel Arkan

In the Middle East, Emirates Steel Arkan is pioneering low-carbon DRI initiatives through its partnership with Abu Dhabi National Energy Company (TAQA). The company is transitioning its existing DRI units to green hydrogen-based production, contributing to the UAE's Net Zero 2050 strategy.

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This release was published on openPR.