The United States direct reduced iron (DRI) market is set to grow at a compound annual growth rate (CAGR) of 4.20% over the forecast period.
North America as well as the Middle East and Africa Emerging as Top Contenders for Direct Reduced Iron (DRI) Trade. Increased demand for direct reduced iron in various applications, such as steel production and construction, is expected to drive the sales during the forecast period.
NEWARK, Del, Aug. 2, 2024 /PRNewswire/ –The direct reduced iron (DRI) market is projected to experience substantial growth, with its value anticipated to increase from USD 28,195.90 million in 2024 to USD 60,013.60 million by 2034. This impressive expansion, marked by a compound annual growth rate (CAGR) of 7.60% over the next decade, highlights the escalating demand and adoption of DRI in the steelmaking industry. Factors such as advancements in production technologies, rising emphasis on reducing carbon emissions, and increasing investments in steel infrastructure are driving this robust market growth. As industries seek more sustainable and efficient steel production methods, the DRI market is set to play a pivotal role in meeting global steel demands while aligning with environmental goals.
Significant changes in the steel industry are pushing forward the demand for direct reduced iron. Presently, the steel industry is going through a pivotal shift toward lower-carbon production. This is raising the demand for alternative technologies like direct reduced iron.
The production of direct reduced iron is projected to separate from steel production, as the global steel sector gradually decarbonizes. More iron ore is expected to be processed in places where renewable energy sources are available and where cheap green hydrogen can be produced.
The resultant direct reduced iron is planned to be shipped to places with higher steel demand. Going forward, North America and the Middle East are assessed to become global leaders in DRI trade.
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How Demand for Iron & Steel to Shape the DRI Market Growth?
Iron & steel industry is considered the backbone of a healthy economy, owing to its major contribution to the growth of any country’s economy. The Iron & steel market is expected to grow at a significantly healthy rate in the coming years. This creates an immense opportunity for market players offering DRI, which act as an environment-friendly, cost-effective and economically feasible raw material for steel making.
The iron & steel market is anticipated to grow significantly as compared to its previous trends of growth. However, this is anticipated to be a minor dip in the market, which will be overcome with precautionary measures and other appropriate remedies. This has the potential to create and improve opportunities for both new competitors and existing market players. A substantial increase in the iron and steel market is expected over the forecast period, which is supposed to drive DRI demand significantly.
“Key players are investing in new establishments and technologies to propel their growth,” Says Nikhil Kaitwade, Associate Vice President at Future Market Insights (FMI).
Key Takeaways from the Direct Reduced Iron Market Report
- Direct reduced iron (DRI) market attained a valuation of USD 23,375.80 million in 2019. By 2023, the market attained a value of USD 26,470.50 million, expanding at a CAGR of 2.50% over the historical period.
- By form, the lumps segment is predicted to account for a value share of 97.60% in 2024.
- Based on the production process, the gas-based direct reduced iron is predicted to acquire a share of 71.40% in 2024.
- India and China are predicted to record a CAGR of 11.30% and 8.40%, respectively, over the forecast period.
- In North America, the United States is set to expand at a CAGR of 4.20% over the forecast period, whereas Canada is slated to register a CAGR of 4.60% during the same time.
- In Europe, Spain and France are in line to observe significant CAGRs of 5.60% and 5.30% over the forecast period.
Country-wise Insights
What is the Demand Outlook for Direct Reduced Iron in GCC Countries?
According to FMI, GCC Countries are expected to account for a fair share of the global market. Over the forecast period, GCC Countries are expected to dominate the Middle East & Africa market with a significant value share in terms of consumption.
Steel production in the Gulf Cooperation Council (GCC) is under pressure, owing primarily to a reduction in industrial output caused by Covid-19. However, with a global recovery and a slew of megaprojects on the frontier, the sector is poised for a brighter future. Saudi Arabia is expected to be the region’s largest market due to higher steel consumption and the proposition of infrastructure projects. One of the major factors driving market growth in the GCC region is an increase in construction activity.
What are the growth prospects of DRI in Russia?
Growing steel industry is a positive sign for DRI market globally. Growing demand from end use sectors such as construction & infrastructure, automotive, aerospace, appliances and others sectors is a primary factor for the growth in steel industry over the coming years, which is expected to have a significant impact of the target market.
Over the last few years, the construction industry has grown significantly. Furthermore, a rebound in residential construction is expected to fuel the construction industry, which is expected to have a significant impact on the target market. Growing consumption of steel in Russia and expanding construction sector are the driving factors for the country. Owing to these factors market is expected to witness increasing demand for DRI in the forecast period.
New Developments in the Market
- In November 2023, JSW Steel Ltd., a prominent maker of alloy in India, announced plans to develop a green steel manufacturing facility by the year 2030. This is in response to the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM).
- In August 2023, H2 Green Steel signed agreements with Rio Tinto for a flat reduction of iron ore pellets and hot briquetted iron in Sweden.
Profile of Top Players Operating in Direct Reduced Iron Market
- ArcelorMittal
ArcelorMittal S.A., based in Luxembourg City, is a multinational steel manufacturing corporation. The company develops smarter steels for people and the planet as the metal becomes an even more relevant component in manufacturing.
- Mobarakeh Steel
Mobarakeh Steel is a private Iranian steel firm that is located 65 km southwest of Esfahan, close to Mobarakeh, Iran. It is a prominent steel entity in the MENA region and has a substantial complex operating in Iran. The company offers extensive services in specialized fields of the steel industry and provides them in all parts of Iran.
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Top Market Players in the Direct Reduced Iron Market
- ArcelorMittal
- Mobarakeh Steel
- Essar Steel
- Qatar Steel
- Hadeed
- SIDOR
- Khouzestan Steel Co.
- Jindal Steel & Power
- Gol-e-Gohar
- Nucor
- Others
Market Segmentation of Direct Reduced Iron
Bifurcation by Form:
- Lump
- Pellets
By Production Process:
- Coal-based
- Gas-based
Based on Application:
- Steel Making
- Construction
Different Regional Markets are as Follows:
- North America
- Europe
- Asia Pacific
- Middle East and Africa
- Latin America
Authored By
Nikhil Kaitwade (Associate Vice President at Future Market Insights, Inc.) has over a decade of experience in market research and business consulting. He has successfully delivered 1500+ client assignments, predominantly in Automotive, Chemicals, Industrial Equipment, Oil & Gas, and Service industries.
His core competency circles around developing research methodology, creating a unique analysis framework, statistical data models for pricing analysis, competition mapping, and market feasibility analysis. His expertise also extends wide and beyond analysis, advising clients on identifying growth potential in established and niche market segments, investment/divestment decisions, and market entry decision-making.
Nikhil holds an MBA degree in Marketing and IT and a Graduate in Mechanical Engineering. Nikhil has authored several publications and quoted in journals like EMS Now, EPR Magazine, and EE Times.
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