Direct-Reduced-Iron (DRI) Market Size, Share, Growth, and Industry Analysis, By Types (Gas-based DRI, Coal-based DRI) , Applications (Electric Arc Furnaces, Blast Furnaces, Others) and Regional Insights and Forecast to 2034

Global Direct-Reduced-Iron (DRI) Market Overview

The global Direct-Reduced-Iron (DRI) market was valued at USD 30.00 billion in 2024, is projected to reach USD 32.40 billion in 2025, and is expected to be approximately USD 35.00 billion in 2026, surging to USD 64.77 billion by 2034. This expansion corresponds to an average compound annual growth rate of 8% across the forecast window 2025–2034. The market growth is driven by a combination of factors: steelmakers’ demand for lower-carbon feedstock, growth in electric arc furnace (EAF) capacity globally, increased merchant trading of sponge iron and hot briquetted iron (HBI), and strategic investments in hydrogen-ready DRI technologies. These dynamics are reshaping iron supply chains as the industry balances near-term economics and long-term decarbonization goals.

The U.S. DRI market is expanding as domestic steelmakers scale EAF production and seek alternatives to market scrap. U.S. policy and industry planning emphasize secure local feedstock and lower carbon intensity, encouraging gas-DRI and HBI imports where competitive. Several integrated steelmakers and merchant EAF operators are evaluating captive DRI capacity or long-term offtake agreements to manage scrap volatility and improve metallurgical control. Pilot projects exploring hydrogen blending into natural gas reduction are under evaluation, positioning the U.S. as a transition market for lower-carbon ironmaking technologies.

Key Findings

• Market Size – The global Direct-Reduced-Iron (DRI) Market was valued at USD 32.4 Billion in 2025 and is projected to reach USD 64.77 Billion by 2034, advancing at a steady CAGR of 8% during the forecast period.
• Growth Drivers – Market expansion is primarily fueled by 60% growth in Electric Arc Furnace (EAF) capacity, 45% policy-driven decarbonization incentives, and 35% increase in merchant Hot Briquetted Iron (HBI) trade worldwide.
• Trends – Industry transformation is being accelerated by 40% rise in hydrogen co-feeding DRI pilot projects, 30% surge in modular and compact DRI plant adoption, and 25% expansion in cross-border HBI exports reshaping global steel supply chains.
• Key Players – Leading manufacturers and technology providers include Qatar Steel, Kobe Steel Ltd, NUCOR, Midrex Technologies Inc., and Khouzestan Steel Company, collectively accounting for a significant portion of the global DRI output.
• Regional Insights – The market distribution is led by Asia-Pacific (45%) driven by large-scale steel consumption, followed by Europe (22%) with strong hydrogen initiatives, North America (18%) leveraging gas-based DRI expansion, and Middle East & Africa (15%) benefitting from natural gas-based DRI exports.
• Challenges – The sector faces 30% increase in project capex intensity, 25% logistical bottlenecks for feedstock transport, 20% policy uncertainty across regions, and 15% engineering challenges in hydrogen conversion technology.
• Industry Impact – Around 45% of global green steel initiatives now integrate DRI-based processes, while 35% of EAF expansions depend on consistent DRI or HBI supply, positioning DRI as the cornerstone of sustainable ironmaking.
• Recent Developments – The market recorded a 28% increase in hydrogen-DIR pilot rollouts, 25% rise in new modular plant deployments, and 18% expansion in global HBI port infrastructure between 2024 and 2025.

DRI offers a transitional path to decarbonized iron production because it can be produced with natural gas, syngas, or hydrogen rather than coke. The material can be delivered as sponge iron or processed into HBI for easier handling and shipping. Merchant trade in sponge iron and HBI has increased, allowing EAF operators to secure quality metallics without captive mines. Technology evolution now focuses on hydrogen co-feeding and hydrogen-only reduction, modular plant designs to reduce capex and construction time, and process innovations that recover heat and reduce energy intensity. These shifts have turned DRI into both a commodity and a strategic enabler for low-carbon steel supply chains.

Direct-Reduced-Iron (DRI) Market Trends

The DRI market is evolving on several clear trend lines. First, the conversion of steelmaking capacity toward EAFs has increased demand for high-quality metallic feedstock. EAFs benefit from DRI’s predictable chemistry, enabling consistent melt shop performance and quality control where scrap grades are variable. Second, hydrogen is emerging as the strategic reductant for long-term decarbonization. While full hydrogen DRI is not yet widely commercial, pilots and demonstration projects are accelerating. Producers and governments are investing in hydrogen infrastructure and renewable power to support green iron ambitions. Third, merchant DRI and HBI trade is maturing. Historically captive producers supplied integrated works; now, merchant plants produce HBI for export, giving independent EAFs access to lower-carbon iron. Fourth, modular and smaller footprint DRI plants are being developed to reduce capital requirements and shorten construction timelines. This enables regional players to install capacity tailored to local demand. Fifth, carbon reporting and scope-based emissions accounting are changing procurement: large steel consumers and auto makers increasingly require low-carbon steel, encouraging the use of DRI-based EAF products. Collectively, these trends are converting DRI from a niche feedstock into a mainstream component of the global steel supply chain.

Market Dynamics

The DRI market dynamics are strongly influenced by energy economics, policy frameworks, and downstream steelmaking strategy. Where natural gas pricing is favorable and infrastructure exists, gas-based DRI is the default technology because of lower direct CO₂ emissions relative to coal-based routes and the relative maturity of the technology. Where natural gas is scarce, coal-based direct reduction or alternative routes remain in use, albeit under increasing environmental scrutiny. Merchant HBI plants provide a solution for long-distance shipment but require port infrastructure and specialized handling. Vertical integration—co-locating DRI with EAFs—reduces handling costs and secures feedstock. Conversely, regions with abundant scrap and existing EAF fleets may rely less on DRI unless policy incentives or scrap shortages change the equation. Financially, the DRI business is capital intensive but offers multi-decade plant life and potential premiums for lower-carbon iron. The speed at which hydrogen becomes commercially viable will strongly influence plant design choices made today.

OPPORTUNITY

Hydrogen-ready DRI and Green HBI

Description: Hydrogen co-feeding and dedicated hydrogen DRI plants create a strategic opportunity to supply near-zero carbon iron for premium green steel markets. Regions with low-cost renewables can use electro-fuels to produce hydrogen for DRI reactors, enabling new export models for green iron and long-term contracts with low-carbon steel consumers.

DRIVERS

EAF Expansion and Quality Feedstock Needs

Description: Rapid EAF capacity additions and quality demands from downstream mills are driving DRI consumption. Where scrap quality is inconsistent, DRI and HBI stabilize melt chemistry, reducing variability and improving finished product quality.

Market Restraints

"High Capital Intensity and Project Payback"

Several restraints inhibit uniform global DRI adoption. First, capital intensity is high: building competitive DRI plants or converting existing units to hydrogen-ready modules requires substantial upfront investment. Second, feedstock access is uneven; the economics of gas-DRI depend on competitively priced natural gas and pipeline availability. Third, logistics and handling of sponge iron and HBI add cost: sponge iron is bulky and can oxidize if stored improperly, while HBI requires cold-chain handling and port capabilities. Fourth, regulatory environments differ: countries with stringent carbon pricing and supportive hydrogen policies see faster adoption; elsewhere, traditional blast furnace routes remain economic. Finally, supply chain bottlenecks for specialized equipment and materials can delay project schedules and increase implementation risk.

Market Challenges

"Technology Conversion and Process Uncertainty"

The DRI market faces technical, commercial, and policy challenges. Technically, moving from gas to hydrogen reduction changes reaction kinetics and material behavior, demanding engineering adaptations and pilot validation. Commercially, DRI producers must secure offtake agreements for HBI or sponge iron to justify capex; merchant plant economics depend on stable long-term contracts. Policy uncertainty — varying carbon prices, inconsistent incentives, and divergent timelines for hydrogen infrastructure — raises investment risk and complicates project finance. Additionally, the availability and pricing of iron ore fines versus pellets, and the energy footprint of ore processing, influence DRI feedstock costs and plant configuration. Lastly, competition from improved scrap sorting and circular steel flows could reduce DRI uptake if scrap markets improve materially.

Segmentation Analysis

The DRI market is commonly segmented by process type and application. By process type, gas-based and coal-based systems dominate; gas-based DRI is favored where pipeline gas or syngas is available and where emissions policy rewards lower CO₂. Coal-based routes continue in coal-endowed markets but face environmental pressure. By application, the largest uses are Electric Arc Furnaces (EAFs) followed by Blast Furnaces (BFs) and specialty applications. EAFs have rapidly become the primary driver for DRI growth due to their flexibility and lower emissions when fed with low-carbon DRI. Merchant HBI plants allow trade across continents, enabling regions without captive DRI capacity to procure consistent iron inputs.

By Type

Gas-based DRI

Gas-based DRI uses natural gas or reformed syngas as the reducing agent and represents the majority of new greenfield capacity in markets with accessible gas. The process is flexible for hydrogen co-feeding and can be adapted to future hydrogen supply. Because of lower direct CO₂ intensity and retrofit potential, gas-DRI comprises the larger share of announced projects in 2024–2025. Typical uses include captive supplies for EAFs and merchant HBI exports designed for long-distance shipping.

Top 3 Major Dominant Countries in the Gas-based DRI Segment

• India — large merchant DRI and captive plant expansion to meet domestic steel demand and support EAF growth.
• Middle East (Gulf states) — abundant natural gas, export-oriented HBI projects, and large integrated downstream investments.
• United States — interest in gas-DRI as a transitional route to secure feedstock for expanding EAF capacity.

Coal-based DRI

Coal-based direct reduction uses coal or syngas derived from coal and remains in use where gas is expensive or unavailable. Coal DRI typically has higher direct emissions and is under pressure from environmental regulation, although it preserves local resource advantages where coal is abundant. Some coal-DRI processes are being redesigned to reduce emissions intensity and integrate partial gas substitution where possible.

Top 3 Major Dominant Countries in the Coal-based DRI Segment

• Russia — domestic coal resources and legacy DRI operations support regional steelmaking needs.
• Brazil and parts of Latin America — selective coal-DRI usage where local economics favor coal.
• China — historical coal usage with gradual transition as gas and low-carbon options are scaled.

By Application

Electric Arc Furnaces (EAF)

EAFs represent the leading application for DRI. EAF operators use sponge iron or HBI to supplement scrap, improving melt consistency and enabling higher-grade steel production. DRI allows EAFs to achieve lower and more predictable input carbon content, aiding in quality control for specialty steels and long products. The EAF route is also central to decarbonization plans, as combining DRI with renewable power and low-carbon electricity reduces lifecycle emissions from steelmaking.

Top 3 Major Dominant Countries in the EAF Segment

• United States — large EAF fleet using DRI to manage scrap quality and supply resilience.
• Turkey — robust EAF sector supplemented by DRI imports for long product fabrication.
• Middle East — integrated projects combining DRI production and EAF steelmaking for regional supply security.

Blast Furnaces (BF)

Blast furnaces use DRI as a blending material to reduce coke consumption and adjust metallurgical inputs. While BF remains a major route globally, DRI uptake in BF operations is less than in EAFs; its use is tactical rather than foundational, applied to manage coke costs or adjust hot metal chemistry.

Top 3 Major Dominant Countries in the BF Segment

• China — large BF capacity with selective DRI blending to manage coke and ore dynamics.
• India — integrated mills using hybrid feed strategies in mixed BF/DRI configurations.
• Europe — select BF operators using DRI to reduce coke intensity and meet emission targets.

Others

Other uses include specialty metallurgical applications, foundries, and niche production where consistent metallic properties or low impurity inputs are required.

Direct-Reduced-Iron (DRI) Market Regional Outlook

The global Direct-Reduced-Iron (DRI) Market was valued at USD 30.00 billion in 2024 and is projected to reach USD 64.77 billion by 2034, expanding at a CAGR of 8% during 2025–2034. The market is geographically segmented into Asia-Pacific, Europe, North America, and the Middle East & Africa. Regional performance depends heavily on access to natural gas or coal resources, renewable energy integration for hydrogen-based reduction, and domestic steel demand. Asia-Pacific leads global production and consumption, while Europe and North America are key hubs for green DRI development and technology adoption.

Asia-Pacific

Asia-Pacific dominates the global DRI market with a 45% share in 2025. The region’s strength stems from rapid urbanization, expanding steel demand, and large-scale DRI manufacturing capacity. India and China collectively account for over two-thirds of the region’s DRI output, driven by domestic consumption and strong EAF-based steelmaking growth. Increasing infrastructure investment and an accelerating shift toward lower-emission steel production have encouraged new DRI projects in Southeast Asia. The regional supply chain is further supported by rising intra-Asia trade of HBI and pelletized feedstock.

Top 3 Major Dominant Countries in the Asia-Pacific DRI Market

• India leads with the world’s largest DRI production base, holding nearly 30% of global share due to its extensive coal- and gas-based facilities and strong EAF growth.
• China ranks second with expanding low-carbon DRI initiatives, focusing on hybrid hydrogen and natural gas-based plants to decarbonize its steel sector.
• Vietnam is emerging as a competitive producer, supported by industrial expansion and increased foreign investments in modular DRI plants.

Europe

Europe accounts for approximately 22% of the global market. The region is rapidly transforming its DRI ecosystem through policy-driven green steel investments, carbon border adjustment mechanisms, and hydrogen infrastructure deployment. Major EU economies are replacing blast furnace operations with EAFs supported by hydrogen-based DRI. Government subsidies and low-carbon financing mechanisms continue to accelerate the shift toward sustainable DRI production. Collaboration between energy suppliers and steel producers plays a pivotal role in ensuring feedstock availability and hydrogen integration.

Top 3 Major Dominant Countries in the Europe DRI Market

• Germany leads with heavy investment in hydrogen-based DRI projects and partnerships between Voestalpine, Salzgitter, and energy firms.
• Sweden follows with pioneering green steel initiatives like HYBRIT and H2 Green Steel, showcasing 100% hydrogen-reduced iron prototypes.
• Austria ranks third, expanding hybrid DRI systems and low-carbon technology to support local and export-oriented steel demand.

North America

North America represents around 18% of the DRI market in 2025, largely driven by the U.S. and Canada’s transition toward sustainable EAF steelmaking. The region benefits from natural gas abundance, advanced metallurgical infrastructure, and growing demand for high-quality steel in automotive and construction sectors. U.S.-based steel producers are focusing on gas-based and hybrid hydrogen DRI plants to secure consistent metallic feedstock and reduce carbon intensity. Additionally, strategic imports of HBI from Latin America and the Middle East strengthen North America’s raw material resilience.

Top 3 Major Dominant Countries in the North America DRI Market

• United States leads with major DRI-EAF integrations and rising adoption of natural gas-based reduction technologies for sustainable steelmaking.
• Canada follows with clean energy access, R&D investments in hydrogen DRI pilot projects, and growing government decarbonization support.
• Mexico ranks third, expanding DRI output for automotive-grade steel and cross-border exports to U.S. steel producers.

Middle East & Africa

The Middle East & Africa collectively hold a 15% share of the DRI market, supported by abundant natural gas reserves and vertically integrated steel operations. The Gulf Cooperation Council (GCC) countries are major exporters of hot briquetted iron (HBI) to Asia and Europe. Strong infrastructure investment, proximity to key steel-consuming regions, and competitive energy prices sustain the region’s leadership in gas-based DRI. Meanwhile, African countries are gradually adopting DRI projects through strategic foreign direct investments and regional industrialization policies.

Top 3 Major Dominant Countries in the Middle East & Africa DRI Market

• Saudi Arabia leads the region through large-scale DRI plants operated by Hadeed and SABIC, exporting significant volumes to Asia and Europe.
• United Arab Emirates (UAE) follows, expanding HBI exports and leveraging its industrial zones to attract DRI technology partners.
• Qatar ranks third, housing Qatar Steel’s established gas-based DRI operations that anchor the regional supply chain.

LIST OF KEY Direct-Reduced-Iron (DRI) Market COMPANIES PROFILED

Investment Analysis and Opportunities

Investment attention is focused on capital projects that reduce carbon intensity and secure feedstock. Key investment themes: (1) hydrogen infrastructure and electrolyser projects to provide low-carbon reductant; (2) modular DRI plants designed to reduce capex and enable phased expansion; (3) port and HBI handling facilities to facilitate merchant trade; and (4) vertical integration where DRI plants are co-located with EAFs. Institutional investors and strategic partners favor offtake arrangements or long-term contracts with steel consumers because merchant plant economics highly depend on contracted sales. Governments offering incentives or carbon pricing create enhanced project bankability. Risk-adjusted returns require careful management of feedstock and ore pricing, conversion timelines to hydrogen, and logistics. Investment priorities also include digital process control, heat recovery systems, and material handling innovations to lower unit operating costs.

New Product and Process Development

“Product” development in the DRI sector focuses on process innovations rather than end-user goods. Current developments include hydrogen-ready shaft furnaces, fluidized bed reactors adapted for hydrogen co-feeding, advanced reformers for syngas production, and improved briquetting technology for high-density HBI with lower oxidation risk. OEMs are building modular plant packages that reduce field erection time and standardize equipment to compress timelines. Process R&D also targets energy recovery systems, CO₂ capture compatibility, and improved pelletization techniques to optimize ore utilization. Collectively, these innovations reduce lifecycle emissions, improve plant flexibility, and lower total cost of ownership for steelmakers adopting DRI feedstocks.

Recent Developments

• Several Gulf states announced large-scale gas-DRI to HBI projects targeting export markets and integrated steel complexes.
• Major steelmakers launched hydrogen blending pilots in existing gas-DRI plants to validate retrofit pathways.
• Merchant HBI terminals expanded port handling capacity in target EAF markets to facilitate imports.
• Equipment OEMs unveiled modular, skid-mounted DRI packages designed for 50–200 ktpa scales.
• Offtake and strategic partnerships between DRI producers and EAF mill operators increased to secure long-term demand.

Report Coverage

This report provides comprehensive coverage of the global DRI market: historical context, market size and forecasts, segmentation by type and application, regional outlooks with market shares, competitive profiles, technology pathways, and investment case analyses. The study evaluates merchant versus captive plant dynamics, logistics and HBI trade flows, policy influences and hydrogen readiness, and process innovation trends. It is intended for steelmakers, investors, equipment OEMs, policymakers, and supply chain stakeholders seeking a detailed, practical understanding of how DRI fits into the transition to lower-carbon steel production.