Direct Reduced Iron Market
Analysis by Form (Lumps, and Pellets); by Process (MIDREX, Coal Based, and Others); and by Application (Steel Making, and Construction) – Global Supply & Demand Analysis & Opportunity Outlook 2023 – 2035
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Analysis by Form (Lumps, and Pellets); by Process (MIDREX, Coal Based, and Others); and by Application (Steel Making, and Construction) – Global Supply & Demand Analysis & Opportunity Outlook 2023 – 2035
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The global direct reduced iron market is estimated to garner a revenue of ~USD 62 billion by the end of 2035 by growing at a CAGR of ~7% over the forecast period, i.e., 2023 – 2035. Further, the market generated revenue of ~USD 27 billion in the year 2022. The growth of the market can be attributed primarily to the rising production of steel worldwide. For instance, the Indian steel industry recorded a growth of nearly 25% in crude steel production in the year 2021.
Direct reduced iron (DRI) also referred to as sponge iron is produced by reducing iron ore directly into iron through the use of a reducing gas, such as natural gas or coal, or even by the use of elemental carbon, such as carbon dioxide. Moreover, the production of high-grade steel, awareness of CO2 emission control, and increasing infrastructure expenditure, along with the expansion of the iron and steel industry. These factors are anticipated to drive global direct reduced iron market growth during the forecast period.
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Base Year |
2022 |
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Forecast Year |
2023 - 2035 |
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CAGR |
~7% |
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Base Year Market Size (2022) |
~USD 27 billion |
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Forecast Year Market Size (2035) |
~USD 62 billion |
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Regional Scope |
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Growth Drivers
Rising Demand for Steel Products Of High Quality- It has been discovered that when a steel scrap is used as raw material for the production of steel, the hydrogen emission produced is more as compared to the emission that is released in the process of DRI. For instance, the high-quality steel market held a market revenue of USD 32 billion in 2019 globally.
Increasing Production of DRI Around the World- It was observed that approximately 104 million tons (Mt) of Direct Reduced Iron (DRI) was produced worldwide in 2020.
Growing Urbanization and Industrialization –Statistics provided by the World Bank indicates that approximately 4.5 million people reside in urban areas, representing 57% of the total population.
Rapid Expansion of the Automotive Sector Worldwide- The growth in the automotive industry in India is expected to reach approximately ~250 billion by 2031, thereby becoming the third largest industry worldwide by 2031.
Growing Chemical Industry- Emerging technologies in India have led to the growth of the chemical industry at a CAGR of 10% and its revenue is projected to reach ~USD 300 billion by the end of 2025.
Challenges
The global direct reduced iron market is segmented and analyzed for demand and supply by process into MIDREX, coal cases, and others. Among these segments, the MIDREX segment held the largest market size by 55% in the year 2022 in the global direct reduced iron market. The MIDREX direct reduction ironmaking process uses natural gas to reduce iron ore. Moreover, the increasing use of DRI as a raw material in the manufacturing of electric arc furnaces (EAFs) in place of scrap iron is expected to augment segment growth over the forecast period. MIDREX is one of the most common processes used in the production of DRI globally. For instance, all over the world, MIDREX had a contribution of around 62% in the production of DRI and also around 80% contribution in producing gas-based DRI globally.
The global direct reduced iron market is segmented and analyzed for demand and supply by form into lumps and pellets. The lumps segment had the largest market in the global direct reduced iron market in the year 2020 and it is expected to do so in the forecast period. This can be attributed owing to the increasing demand for lumps in direct reduced iron in multiple applications including the construction and automotive sector. The lumps are usually higher in iron and low in other materials. The crushed ore is converted into lumps and later they are sold separately.
Our in-depth analysis of the global direct reduced iron market includes the following segments:
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By Form |
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By Process |
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By Application |
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The direct reduced iron market in the Asia Pacific captured the largest market share in the year 2022 backed by the expansion of the construction industry in the region. For instance, according to estimates, by the end of 2025, the construction industry in India is expected to reach a total value of USD 1.3 trillion. Moreover, increasing steel production, along with demand for DRI from various industries such as automotive and aerospace are factors expected to drive the direct reduced iron market in the region during the forecast period. India from the Asia Pacific region is regarded as one of the biggest producers of steel in the world. This fact is anticipated to drive the growth of the market in this region. For instance, estimates indicate that India's construction industry will achieve a total value of USD 1.3 trillion by the end of 2025. Additionally, the market in the region is also anticipated to be driven during the forecast period by government support for the expansion of the chemical and petrochemical sector in the area. For instance, the Department of Chemicals and Petrochemicals received roughly USD 27 million from the Indian government as part of the Union Budget 2022–2023.
Europe is expected to reach an estimated value of ~USD 1204 million by end of 2035. The rising steel industry is a primary driving factor for the direct reduced iron market globally. Growing demand for direct reduced iron from sectors including automotive, construction, appliances, aerospace, and others are the primary factors driving the growth of the market. Over the past few years, the construction industry was seen to grow significantly. Moreover, a boom in residential construction is likely to drive the construction industry, which is expected to have a significant impact on the target market growth. Growing consumption of steel in Europe and the rise in the construction sector are the growth-driving factors for the direct reduced iron market in the region. Seeing these factors, the direct reduced iron market is expected to see significant growth in the forecast period.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Ans: Widespread use in various end-use industries such as construction, and automotive, along with steel production on large scale are the major factors driving the growth of the direct reduced iron market.
Ans: The market is anticipated to attain a CAGR of ~7% over the forecast period, i.e., 2023 – 2035.
Ans: Stringent Government regulations and production costs are a few factors likely to hamper the market growth.
Ans: The market in Asia Pacific held the largest market share in 2022 and is expected to provide more business opportunities in the future
Ans: The major players in the market are Midrex Technologies, Inc., Voestalpine AG, Khouzestan Steel Company, Qatar Steel, Hadeed Steel Industries, Jindal Shaheed Iron & Steel LLC, Tosyali Algeria A.S., Welspun Group, and many more.
Ans: The company profiles are selected based on the revenues generated from the product segment, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by form, process, application, and by region.
Ans: The MIDREX segment captured a market share of 55% by 2022 and is expected to display significant growth opportunities.
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