Direct Reduced Iron Market size was over USD 56.94 billion in 2024 and is expected to exceed USD 180.92 billion by the end of 2037, witnessing over 9.3% CAGR during the forecast period i.e., between 2025-2037. In the year 2025, the industry size of direct reduced iron is evaluated at USD 61.18 billion. Globally steel industry is the biggest contributor to greenhouse gas emissions in the atmosphere. Generally, iron is produced with the help of a blast furnace route which is one reason behind high carbon emissions. However, the directly reduced iron does not produce a high amount of greenhouse gases, particularly carbon dioxide. It enables more environment-friendly approaches to be adopted by steel producers, which reduces their carbon footprint and mitigates climate change. The growing demand for direct reduced iron as a primary raw material for steel production due to its low carbon emissions compared with traditional Iron Production Process is an important factor driving the development of the direct reduced iron market driven by increasing focus on energy efficiency and reducing greenhouse gas emissions in the steel industry. Thus, growing steel production is predicted to drive the growth of the market in the forecast period. According to the World Steel Association, global crude steel production stood at 1,950.5 million tons in 2021 and is expected to grow by 3.7% compared with 1,880.4 million tons in 2020.
Steel is a principal raw material for products and projects in many sectors, including construction, the automobile sector as well as industry. The growth of infrastructure, urbanization, automotive manufacturing and industrial production is having a positive impact on steel demand. In view of continued increases in steel consumption, there is a corresponding need for iron production, which constitutes an essential part of the manufacture of steel.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
9.3% |
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Base Year Market Size (2024) |
USD 56.94 billion |
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Forecast Year Market Size (2037) |
USD 180.92 billion |
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Regional Scope |
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Forms (Pellets, Lumps)
In terms of form segmentation, the pellets segment in the direct reduced iron market is predicted to hold the largest revenue share of 47% by 2037. The direct reduced iron pellets are made up of run-of-mine iron ores. In addition, iron ore pellets can provide several advantages, such as the common size and composition of iron ore pallets that help to ensure that there will be consistent feedstocks in the DRI process. With the consistency of these iron balls, it is thus easier to achieve a safe and controlled reduction process. The iron ore pellets have a high iron content of around 70%, which allows them to be more efficient in reducing and results in increased dried mineralization yields.
Production Process (Gas Based, Coal Based)
Direct reduced iron market share from the gas based segment is expected to surpass 53% by the end of 2037. Gas-based production is essentially a reverse current process in which hot and highly reducing gases are used to make lump iron ore or pellets into metallic iron. Compared to other processes, gas-based production is relatively efficient in terms of benefits provided by the Gas Production Process. The way this is done makes it possible to control the reduction process as precisely as other iron-making processes, resulting in lower energy consumption. Furthermore, owing high adoption of natural gas and considering environmental concerns the growth of this segment is predicted to grow in the projected period. The world's consumption of natural gas amounted to approximately 3,84 trillion cubic meters in 2022.
Our in-depth analysis of the global market includes the following segments:
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Forms |
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Production Process |
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Application |
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APAC Market Forecasts
The Asia Pacific direct reduced iron market is predicted to hold the largest revenue share of 51% by 2037. The Asia-Pacific region is a major hub for steel production, with countries such as China, India, and Japan leading the way. As steel demand continues to increase in sectors such as construction, automotive, and infrastructure development, a stable and cost-effective supply of steel is required. DRI provides a reliable and efficient alternative to traditional steelmaking methods. Its use in steel production will help meet the growing demand for steel in the region, thereby driving the growth of the DRI market. Rapid infrastructure development, growing investment in development, and urbanization in countries such as China and India are driving demand for steel in the Asia-Pacific region. Welspun announced plans to invest about USD 5 billion in Telangana over the next five years, across segments such as IT and ITES clusters and logistic parks, in September 2023. Welspun World Chairman B.K. Goenka said that it would create around 50,000 jobs, including 20,000 direct and 30,000 indirect ones.
European Market Statistics
The direct reduced iron market in the Europe region is expected to grow substantially by the end of 2037. In the production process, operational efficiency and energy consumption have been greatly improved due to the development of advanced DRI technologies in the region. The modern generation of distributed renewable energy plants offers enhanced energy recovery systems and optimized process parameters that lead to a reduced power requirement for each tonne of DRI produced. Given the increased energy costs and environmental concerns, energy efficiency is an essential factor for Europe's steel producers.
Author Credits: Rajrani Baghel
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