Hot Briquetted Iron (HBI) Market Outlook 2035: Global Industry to Reach USD 8.1 Billion by 2035 amid Accelerating Decarbonization and EAF Expansion

The global hot briquetted iron (HBI) market is poised for sustained growth, rising from a valuation of US$ 4.4 billion in 2024 to approximately US$ 8.1 billion by 2035, progressing at a compound annual growth rate (CAGR) of 5.8% during the forecast period from 2025 to 2035. The industry is undergoing a structural transformation as the global steel sector pivots toward decarbonized, energy-efficient, and high-quality raw material sourcing. Analysts note that HBI's chemical purity, metallurgical performance, and safety advantages over iron are positioning it as a strategic enabler in low-carbon steel production.

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Analysts' Viewpoint on the HBI Market Scenario

Market analysts highlight that the HBI market is characterized by stability and growing strategic relevance amid the steel industry's decarbonization push. Produced by compacting direct reduced iron (DRI) at elevated temperatures, hot briquetted iron resists re-oxidation and offers a high-density, safe-to-handle, and transportable form of reduced iron. Its minimal residual impurities make it an ideal feedstock for electric arc furnaces (EAFs) and, in certain cases, blast furnaces (BFs) seeking to reduce carbon emissions.

The growing reliance on capital-efficient DRI plants, integration of renewable energy in ironmaking, and technological collaborations among steel producers and equipment suppliers are driving process optimization, energy savings, and CO2 emissions reduction. These advancements align with national and corporate net-zero targets, boosting the demand for HBI globally.

Global Hot Briquetted Iron (HBI) Market Overview

Hot briquetted iron is a densified and compacted form of direct reduced iron that addresses safety and transport limitations inherent to DRI. The process, involving compression of hot DRI at high temperatures, yields briquettes with low reactivity and stable metallurgical properties. This innovation allows HBI to be safely shipped and stored, offering an efficient feedstock for EAF-based steelmaking and serving as a sustainable bridge toward green steel production.

The product's high iron content and low impurity levels make it indispensable for steel manufacturers targeting superior steel grades and consistent output. Moreover, its lower carbon intensity compared to coke-based feedstocks allows producers to significantly reduce their environmental footprint, especially when HBI is produced using hydrogen-based DRI (H2-DRI) technologies.

Key Market Drivers

Decarbonization Push in the Steel Industry

The steel industry, accounting for roughly 7-9% of global CO2 emissions, is under intense scrutiny from regulators, investors, and end-users to adopt sustainable manufacturing practices. The Paris Agreement, Science-Based Targets Initiative (SBTi), and national net-zero commitments are collectively accelerating the adoption of low-carbon steelmaking technologies.

HBI plays a central role in this transformation. Unlike traditional blast furnace production, which relies on coking coal, HBI is produced using natural gas or hydrogen, resulting in significantly lower CO2 emissions. Furthermore, HBI's high metallization and iron purity make it an ideal raw material for electric arc furnaces, which inherently produce fewer emissions.

Regions like Europe and Asia-Pacific are witnessing a rapid shift toward EAF-based production, especially where renewable energy sources-solar, wind, and hydro-are available to power furnaces. As a result, HBI consumption is expected to expand exponentially, not only as a cleaner alternative to but also as a strategic enabler of hydrogen-based ironmaking.

Government initiatives introducing carbon pricing, emissions trading schemes, and green public procurement are also propelling adoption. Moreover, automotive and construction industries are demanding certified low-carbon steel, prompting steelmakers to integrate HBI into their Scope 1 and 2 emission reduction strategies.

Thus, decarbonization is not just a compliance imperative but a competitive differentiator, with HBI positioned as a premium raw material in the emerging green steel value chain.

Rising Adoption of Electric Arc Furnaces (EAF)

The global transition toward Electric Arc Furnace (EAF) technology is another major growth catalyst for the HBI market. EAFs are more energy-efficient, cost-effective, and environmentally friendly than traditional blast furnaces, making them the preferred route for steelmakers pursuing sustainability.

However, the quality and availability of steel-a key raw material for EAFs-pose limitations. High-grade HBI effectively supplements or replaces, providing uniform iron content (>92% Fe) and ensuring consistent metallurgical performance. Its clean chemistry reduces slag formation, enhances energy efficiency, and improves steel purity.

The EAF's flexibility in scaling production, coupled with HBI's storability and consistent quality, provides operational stability in volatile raw material markets. Emerging steel hubs in the Middle East, India, and Southeast Asia are increasingly co-locating EAFs with HBI production units, optimizing logistics and ensuring sustainability.

As the EAF share of global steel production rises-projected to exceed 50% by 2035-the role of HBI as a feedstock of choice will intensify, ensuring that steelmakers meet cost, quality, and sustainability benchmarks simultaneously.

Market Segmentation Insights

Fe Content: >92% Segment Dominates Market Share

The >92% Fe content segment accounted for nearly 64.7% of the total market share in 2024 and is projected to maintain dominance through 2035. This segment's growth is attributed to rising demand for high-purity feedstock in EAF and DRI operations, enabling energy efficiency, lower impurity levels, and superior metallurgical performance.

Stringent emission norms, especially in Europe and East Asia, are further accelerating the use of high-grade HBI as a sustainable and cost-efficient raw material. This trend underscores the industry's move toward quality-assured, low-carbon steelmaking aligned with environmental compliance and energy optimization objectives.

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Regional Market Dynamics

Asia Pacific: The Global Leader with 49.9% Market Share

The Asia Pacific region commands nearly 49.9% of the global HBI market, driven by rapid industrialization, infrastructure expansion, and rising steel output in countries such as China, India, Japan, and Vietnam. Government-funded infrastructure projects and urbanization initiatives are boosting steel demand, particularly high-quality variants suitable for construction, automotive, and energy applications.

Simultaneously, the growing penetration of EAFs across Asia Pacific, supported by regional policies promoting sustainable metallurgy, ensures a robust market for HBI.

Europe: 29.2% Market Share with a Decarbonization Edge

Europe remains the second-largest regional market, accounting for 29.2% share, primarily fueled by green steel initiatives, hydrogen-based DRI pilot projects, and gradual phase-out of coal-based blast furnaces. The European Union's Fit for 55 framework and Carbon Border Adjustment Mechanism (CBAM) are accelerating the shift toward HBI-centric steelmaking, making the region a critical growth frontier.

Competitive Landscape and Recent Developments

The global HBI market remains moderately consolidated, with major players investing heavily in capacity expansion, hydrogen-based DRI plants, and strategic collaborations. Leading companies include Jindal Shadeed Iron & Steel LLC, METALLOINVEST MC LLC, Voestalpine Rohstoffbeschaffungs GmbH, Qatar Steel, KOBE STEEL, LTD, Cleveland-Cliffs Inc., and Midrex Technologies.

In April 2025, Primetals Technologies, Rio Tinto, Mitsubishi, and Voestalpine announced a landmark collaboration to construct an industrial-scale H2-DRI/HBI pilot plant in Linz, Austria. The facility aims to produce three tons of hot metal per hour using hydrogen-based reduction, achieving near-zero CO2 emissions by 2027.

Similarly, Metalloinvest's 2023 modernization of its Lebedinsky GOK HBI-3 plant increased annual output by 3%, reaching over 2 million tons of briquettes. ArcelorMittal's acquisition of an 80% stake in Voestalpine's Corpus Christi (Texas) HBI facility further demonstrates the strategic importance of high-capacity, green-compatible HBI plants.

Future Outlook

The next decade will see the HBI market doubling in valuation, driven by EAF expansion, hydrogen-based ironmaking, and policy-driven decarbonization. As governments tighten emission regulations and investors prioritize ESG portfolios, steelmakers will continue to invest in HBI production and utilization to remain competitive.

By 2035, HBI will not merely be a feedstock but a critical enabler of the global green steel transition-bridging the gap between conventional processes and carbon-free steelmaking. The convergence of technology, regulation, and market dynamics positions the Hot Briquetted Iron (HBI) industry as a cornerstone of the next-generation sustainable steel economy.

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