Direct Reduced Iron (DRI) Market Size, Share, and Growth Forecast 2026 - 2033

The global Direct Reduced Iron (DRI) market size is expected to be valued at US$ 46.8 billion in 2026 and projected to reach US$ 67.6 billion by 2033, growing at a CAGR of 7.1% between 2026 and 2033.

Global DRI production hit a record 140.8 million metric tons (Mt) in 2024, up 3.8% year-on-year, per World Steel Association (worldsteel) data, driven by India's rotary kiln capacity surge and expanding gas-based shaft furnace output in the Middle East.

Steel decarbonization mandates across the EU, U.S., and India are accelerating EAF steelmaking adoption, which requires DRI as a premium scrap substitute. MIDREX Plants, the dominant technology platform, produced a record 82.17 Mt in 2025, reflecting sustained production growth across the global fleet.

Drivers - EAF Steel Decarbonization Mandates Accelerating DRI Demand as Premium Scrap Substitute

Electric arc furnace (EAF) steelmaking is the primary low-carbon pathway for the global steel industry. EAF requires high-quality iron inputs, with DRI the preferred premium feedstock for producing low-residual, high-quality steel grades.

As carbon pricing, emissions trading systems, and net-zero mandates pressure blast furnace operators to transition to EAF-based production, structured long-term demand for DRI is expanding across all major steelmaking regions.

The world steel decarbonization roadmap requires EAFs' share of global steel production to rise from 28% to over 40% by 2050. The EU's CBAM (Carbon Border Adjustment Mechanism), effective from 2026, directly incentivizes EAF adoption among European steel producers by placing a carbon cost on blast furnace imports.

ArcelorMittal has committed to installing EAF-based DRI capacity at its Ghent, Belgium and Hamburg, Germany, sites. Voestalpine and Salzgitter AG have committed to DRI-EAF transitions under Europe's IPCEI Hydrogen programs. MIDREX Plants produced a record 82.17 Mt in 2025, a 7.78% year-on-year increase per MIDREX Technologies disclosures.

EAF transition timelines across Europe, India, and the Gulf are structurally expanding DRI procurement requirements well beyond historical baseline demand. This driver will compound through 2033 as steel sector decarbonization policies intensify.

India's Rotary Kiln Expansion and Coal-Based DRI Production Scale-Up

India is the world's largest DRI producer and is scaling output at an extraordinary pace through coal-based rotary kiln technology. Unlike the Middle East's gas-based shaft furnace DRI, India's production relies on domestic coal and iron ore, both abundantly available, enabling cost-competitive DRI production that fuels the country's rapidly expanding induction furnace (IF) and EAF steel sectors without dependence on natural gas imports.

Per worldsteel data, India's DRI output rose by 10.9% in 2024, adding 5.6 Mt to reach an estimated 47+ Mt annually. India was the largest DRI producer in both January 2026 (5.37 Mt) and June 2026 (4.98 Mt) among all surveyed countries. Since 2019, India's coal-based rotary kiln DRI production grew by almost 20 Mt (76.5%).

The National Steel Policy targeting 300 Mt of crude steel capacity by 2030 is compelling domestic DRI capacity additions from producers including Tata Sponge, JSPL, VISA Steel, and SAIL.

India's production scale and expansion pipeline make it the single most influential country-level growth driver in the global DRI market. Its rotary kiln capacity additions will sustain record-breaking production through the forecast period.

Restraints - Natural Gas Price Volatility Constraining Gas-Based DRI Plant Economics

Gas-based DRI produced via the MIDREX and HYL/ENERGIRON shaft furnace processes dominates Middle Eastern and CIS production but is highly sensitive to natural gas price fluctuations. When gas prices spike, the cash cost of DRI production rises sharply, compressing margins for DRI producers and reducing the economic advantage of EAF-DRI steelmaking relative to blast furnace routes. This volatility creates procurement uncertainty for steel mills dependent on gas-based DRI supply.

European gas prices surged over 10x in 2022 during the energy crisis, rendering several European EAF-DRI operations economically unviable and prompting temporary production curtailments. The IEA projects that natural gas price volatility will remain elevated through 2030 given geopolitical supply uncertainties across key producing regions. Middle Eastern DRI producers with long-term gas supply contracts such as those in Iran and Qatar maintain a structural cost advantage, but export volumes are constrained by sanctions and geopolitical factors.

Sanctions and Geopolitical Constraints on Iranian DRI Export Capacity

Iran is the world's second-largest DRI producer after India, contributing over 2.0-2.5 Mt per month in 2026 per Worldsteel survey data. U.S. and EU sanctions significantly restrict Iran's ability to export DRI, access international banking channels for trade financing, and procure advanced equipment for capacity expansion.

These constraints suppress global DRI trade volumes and reduce supply availability in regions that could absorb Iranian output.

Sanctions have effectively locked Iran out of key European and Asian steel markets, diverting its DRI output primarily toward domestic use and informal trade channels.

For the global DRI market, this represents a persistent supply bottleneck. Iran's installed DRI capacity could supply multiple export markets if sanctions were lifted, but current restrictions mean this latent capacity cannot be productively mobilized to meet rising global EAF steel demand.

Opportunities - HBI Export Infrastructure for Green Steel Supply Chains in Europe and North America

Hot Briquetted Iron (HBI) is the fastest-growing DRI product type and the preferred form for long-distance maritime trade. HBI's compressed, stable form enables safe ocean freight, unlike CDRI, which can self-heat in bulk, making it the critical link between low-cost DRI production regions (Middle East, India, North Africa) and steel decarbonization markets in Europe and North America. Rising EAF capacity in Germany, France, and the U.S. is creating structured HBI import demand.

The worldsteel 10-year trend shows DRI production has grown at a 6.6% CAGR with shaft furnace output up 60.6%. Cleveland-Cliffs operates HBI production at its Toledo, Ohio facility, the largest in North America, supplying EAF operators across the U.S. Great Lakes steelmaking corridor.

Emirates Steel Arkan and Qatar Steel are developing HBI export terminal capacity targeting European green steel supply chains. ArcelorMittal's Hamburg DRI plant is configured for HBI import, demonstrating European buyer readiness. HBI trade infrastructure development is a multi-billion-dollar strategic opportunity for DRI producers and port operators. First movers establishing export terminal capacity aligned with European EAF schedules will secure premium long-term supply contracts.

Green Hydrogen-Based DRI for Net-Zero Steel Production

Hydrogen-based DRI, where natural gas in the MIDREX or ENERGIRON process is replaced by green hydrogen, is the most transformative application opportunity in the DRI market.

Green hydrogen DRI produces near-zero carbon emissions at the steelmaking process level, enabling steel producers to claim verified net-zero steel for premium-priced automotive, construction, and appliance markets. Europe's regulatory and corporate demand for green steel is the primary pull factor.

The HYBRIT consortium (SSAB, LKAB, Vattenfall) in Sweden demonstrated hydrogen-based DRI at pilot scale and is targeting commercial production at Luleå by 2026. Voestalpine's H2FUTURE project in Austria is validating large-scale green hydrogen injection into its DRI shaft furnace.

ArcelorMittal's Hamburg plant began hydrogen co-injection into its MIDREX DRI shaft furnace in 2023, achieving CO2 reductions of over 50% per tonne of DRI produced. MIDREX Technologies' MIDREX Flex platform enables variable hydrogen blending from 0% to 100% without process redesign, enabling a flexible transition pathway. Hydrogen-based DRI positions early adopters to supply Europe's growing green steel premium market. Producers that demonstrate certified low-carbon DRI credentials will access differentiated pricing and long-term offtake agreements from automotive OEMs.

Product Type Analysis

Cold DRI (CDRI) leads the product type segment with a 68% share in 2026. CDRI is the most widely produced DRI form globally; it is cooled after reduction, enabling safe storage and transport in bulk. India's dominant rotary kiln production base outputs virtually all of its DRI as CDRI, which is consumed by India's large network of induction furnaces and small electric arc furnaces.

CDRI's dominance reflects the scale of India's production; the country accounts for over 45% of global DRI output in 2026 and the coal-based rotary kiln technology's inherent output characteristics. Established logistics infrastructure, storage yard networks, and procurement frameworks reinforce CDRI's leading position.

Hot Briquetted Iron (HBI) is the fastest-growing DRI product type, driven by rising international trade demand and green steel supply chain development. HBI's dense, stable form enables ocean freight that CDRI cannot safely support. As European and North American EAF operators seek low-carbon iron feedstock imports, HBI is the preferred traded form. New HBI export capacity investments in the Middle East, North Africa, and U.S. are accelerating production share growth for this premium segment, commanding pricing above CDRI and HDRI in export markets.

Process Type Analysis

MIDREX technology leads the process type segment, accounting for an estimated 59% of global gas-based DRI production in 2026. MIDREX Plants produced 82.17 Mt in 2025, a 7.78% increase over 2024, with at least eight modules setting new annual production records and ten modules exceeding 8,000 operating hours per MIDREX Technologies disclosures.

Cumulatively, MIDREX Plants have produced over 1.558 billion tonnes of all DRI forms. Its Flex platform enabling hydrogen co-injection is further differentiating the technology for green steel applications, reinforcing its competitive lead and production volume dominance globally.

Rotary Kiln is the fastest-growing process segment and the backbone of India's CDRI production. India's coal-based rotary kiln DRI output has grown by 76.5% since 2019 per worldsteel data, the fastest production expansion of any DRI process type globally.

The rotary kiln's independence from natural gas makes it particularly resilient to gas price volatility, giving it a structural advantage in India's energy cost environment. New rotary kiln capacity additions continue across Odisha, Chhattisgarh, and Jharkhand states, sustaining the fastest process-level growth trajectory.

North America Direct Reduced Iron Market Trends and Insights

North America accounts for 9% of the global DRI market in 2026. The region's DRI sector centers on natural gas-based MIDREX shaft furnace production in the U.S. and Mexico, serving domestic EAF steel mills. Rising EAF steelmaking capacity in the U.S.

Infrastructure Investment and Jobs Act steel demand programs are expanding DRI procurement requirements. HBI import infrastructure from Cleveland-Cliffs and planned Gulf Coast terminal projects are supplementing domestic output.

U.S. Direct Reduced Iron Market Size

The U.S. DRI market represents an estimated 78% of North America's consumption in 2026. Cleveland-Cliffs' Toledo, Ohio HBI plant with a capacity of over 1.9 Mt/year is the largest HBI production facility in North America, supplying EAF mills across the Great Lakes. Nucor Corporation's EAF expansion programs and Steel Dynamics' capacity additions are generating structured long-term HBI and CDRI procurement demand.

Middle East & Africa Direct Reduced Iron Market Trends and Insights

The Middle East & Africa region holds 23% of the global DRI market in 2026, with natural gas-rich GCC countries and Iran anchoring production. The region is the world's largest DRI exporting zone, particularly for HBI serving steel markets in Europe, Asia, and the Americas. Algeria expanded gas-based DRI capacity in 2024, and Qatar's dedicated HBI facilities continue serving European green steel supply chains.

Iran Direct Reduced Iron Market Size

Iran was the world's second-largest DRI producer in 2026, outputting 2.5 Mt in June 2026 and 2.0 Mt in January 2026 per worldsteel data. Iran's natural gas-rich reserves and extensive gas-based shaft furnace fleet position it as a low-cost DRI producer. Its production primarily supplies domestic EAF steel mills, with export volumes constrained by U.S. and EU sanctions on Iranian trade and banking access.

Qatar Direct Reduced Iron Market Size

Qatar is a strategically positioned HBI exporter serving European EAF green steel programs. Qatar Steel operates MIDREX-based DRI/HBI plants using low-cost Qatari natural gas, with HBI export volumes targeted at European steel decarbonization programs. Qatar's competitive gas costs, export port infrastructure, and long-term supply agreements with European mills make it a premium HBI supplier with a growing export share.

Rest of MEA Direct Reduced Iron Market

The rest of MEA, including Algeria, Egypt, UAE, and South Africa, adds incremental DRI capacity. Algeria brought new gas-based DRI capacity online in 2024. Egypt's ESISCO facility did not operate in 2025 per MIDREX data, highlighting intermittent production risks. GCC nations, including the UAE and Saudi Arabia, host additional shaft furnace capacity serving both domestic consumption and regional export markets.

Asia Pacific Direct Reduced Iron Market Trends and Insights

Asia Pacific leads the global DRI market with a 54% share in 2026, with India alone accounting for 45% of global DRI output, making it the single most consequential production country in the world. India's coal-based rotary kiln DRI sector has grown by 76.5% since 2019.

China, which added new gas-based DRI capacity in 2024, and other Asian nations are contributing to the region's production growth. The region's EAF steel expansion, raw material integration, and cost-competitive production bases are reinforcing Asia Pacific's structural dominance.

India Direct Reduced Iron Market Size

India accounts for 45% of global DRI production in 2026, making it the world's undisputed leader. Output reached 5.37 Mt in January 2026 and 4.98 Mt in June 2026 per World Steel monthly surveys. India's rotary kiln DRI capacity is concentrated in Odisha, Chhattisgarh, and Jharkhand states. The National Steel Policy's 300 Mt capacity target by 2030 is compelling continued DRI capacity additions from producers including JSPL, VISA Steel, and Tata Sponge.

China Direct Reduced Iron Market Size

China added new natural gas-based DRI capacity in 2024 per world steel production data, marking the country's entry into gas-based shaft furnace DRI as part of its steel sector decarbonization program.

China's National Development and Reform Commission (NDRC) has identified DRI-EAF as a strategic pathway for reducing blast furnace dependence. China's DRI sector is at an early but rapidly scaling stage, with production volumes growing from a low base toward meaningful contribution within the Asia Pacific market.

Rest of Asia Pacific Direct Reduced Iron Market

The rest of Asia Pacific, including Malaysia, Pakistan, and Trinidad (via export markets) contributed intermittently to regional DRI output. Lion DRI in Malaysia and NSCL in Pakistan did not operate in 2025 due to commercial conditions per MIDREX data. South and Southeast Asian nations represent a nascent but growing DRI demand base as EAF steelmaking penetration increases across the region through 2033.

The global DRI market is moderately consolidated in gas-based shaft furnace production and fragmented across rotary kiln-based production. Major producers hold strong positions through large-scale plants, access to natural gas or hydrogen, and integrated steelmaking operations. The market also shows regional concentration, with India, Iran, Russia, and the Middle East accounting for a large share of global DRI output.

ArcelorMittal, NUCOR, Qatar Steel, Kobe Steel Ltd., Jindal Shadeed Iron & Steel LLC, and AM/NS India are among the key participants shaping the competitive landscape. These companies compete through production capacity, plant utilization, raw material access, energy efficiency, product quality, and integration with EAF-based steelmaking.

Technology providers such as Midrex Technologies Inc. and Tenova S.p.A. also influence competition through shaft furnace technologies and process solutions. Competition in gas-based DRI centers on MIDREX and ENERGIRON technology platforms, plant scale, natural gas availability, and process efficiency. Producers with access to low-cost gas and suitable iron ore pellets hold cost advantages in conventional DRI production. The shift toward hydrogen-based DRI is also creating competition around hydrogen-ready furnace designs, carbon intensity, and the ability to convert existing plants to lower-carbon production.

Key Developments:

• January 2026: MIDREX Technologies reported its plants produced 82.17 Mt of DRI in 2025, a 7.78% year-on-year increase, with at least eight modules setting new annual production records, confirming sustained global MIDREX fleet performance growth.
• March 2026: World Steel data confirmed India produced 5.37 Mt of DRI in January 2026, the highest monthly output of any country surveyed followed by Iran, Russia, and Egypt, reinforcing India's dominant production lead globally.
• August 2026: The ArcelorMittal Hamburg DRI plant advanced hydrogen co-injection trials under its H2Hamburg program, targeting commercial-scale green DRI production using electrolysis-sourced hydrogen to serve European automotive green steel supply chains.