Direct Reduced Iron (DRI) Market Size, Share, and Growth Forecast for 2025 - 2032

The global direct reduced iron (DRI) market size is likely to be valued at USD 43.7 Bn in 2025 and is expected to reach USD 70.6 Bn by 2032, growing at a CAGR of 7.1%.

Steelmakers lifted DRI output to 143.6 million tons in 2024 after posting 135.7 million tons in 2023, and MIDREX® plants delivered 75.7 million tons last year more than 80 % of shaft-furnace production underscoring the technology’s dominance. Rising carbon pressure powers this surge.

The steel industry emitted 1.91 t CO? and consumed 20.99 GJ of energy per tonne of crude steel in 2022 switching from blast furnaces to electric arc furnaces (EAFs) paired with DRI slashes both metrics. EAFs provided 28 % of global steel in 2023 and should reach 41 % by 2030.

In the United States, primary steelmaking generates 74% emissions, yet it produced 5.5 million tons of DRI in 2023 and plans to achieve 7–9 Mt per-year clean-hydrogen capacity by 2030 fuel for green DRI. India led December 2023 output at 4.86 Mt, while Egypt, Russia, and Saudi Arabia remained key players. Hot-briquetted iron (HBI) gains traction for safer shipping, and hydrogen-based DRI lines up as the next growth engine. Robust construction, infrastructure, and automotive demand, especially across Asia Pacific keep steel orders strong, locking DRI in as a pivotal feedstock for a lower-carbon future.

Key Industry Highlights:

• Green hydrogen-based DRI presents a major growth opportunity, with global electrolyser capacity planned at over 520 GW to enable up to 49 Mt of annual hydrogen production by 2030.
• Steelmakers are shifting rapidly to Electric Arc Furnaces (EAFs), now accounting for 43% of planned capacity, reinforcing DRI as a preferred input for low-emission steel.
• High dependency on natural gas remains a key restraint, with energy costs accounting for 60% of operational expenses and causing regional production uncertainty.
• East Asia leads with 26.7% market share, as countries like China and Japan deploy hydrogen metallurgy projects and innovate with ENERGIRON® and HyREX technologies.
• South Asia & Oceania contribute 24.1% to global DRI output, led by India and Iran’s mix of coal-based and gas-based DRI, supported by infrastructure expansion.
• North America is gaining momentum, with U.S. Steel’s $150 million investment in DR-grade pellets and Canada’s positioning as a cost-efficient green DRI producer.

Driver - Shift toward low-carbon steel production

Steelmakers act on climate pressure by swapping coal-hungry blast furnaces for cleaner electric arc furnaces (EAFs). Planned capacity now shows a 43 % EAF share up ten points in twelve months, while fresh Direct Reduced Iron (DRI) lines reach 36 % of iron projects, most of them Midrex units ready for hydrogen. Midrex plants already supply 75.7 Mt, or four-fifths of shaft-furnace DRI, and help push global output to 143.6 Mt in 2024.

Meeting the International Energy Agency’s path to 1.5 °C means shelving 347 Mt of coal-based BF-BOF projects and adding 610 Mt of low-carbon EAF capacity by mid-century. Rising steel demand, green-hydrogen incentives, and the safer shipping profile of hot-briquetted iron (HBI) all reinforce the trend. Put simply, DRI and EAF technology turns the decarbonisation mandate into a growth engine for the next generation of steelmakers.

Restraint - High dependence on natural gas and energy costs

Natural gas plays a key role in direct reduction processes, holding around 60% of a plant’s operating expenses. When gas prices rise sharply, as seen in the U.S. from January to August 2024, or in Europe where rates remained three times the five-year average margins get hit immediately. A Midrex unit producing 1 million tonnes of DRI per year needs close to 2 TWh of gas, forcing producers in high-LNG or poorly connected regions into costly positions.

Iron ore volatility adds more strain. The 62% Fe benchmark slipped below $100/t in early 2024, surged past $130/t by December, and dragged the DR premium down from $65/t in August to below $50/t by September. Producers must constantly balance ore costs, energy bills, and shifting steel prices. When energy spikes close the gap between scrap-based EAFs and gas-based DRI routes, investors delay hydrogen upgrades and financing slows. This instability keeps expansion uneven and limits DRI growth in key regions.

Opportunity - Growth in hydrogen-based DRI (Green DRI)

The Direct Reduced Iron (DRI) market is witnessing a transformative opportunity driven by the rapid scale-up of green hydrogen production. Global electrolyser capacity plans have surged to over 520 GW, with expected green hydrogen output reaching 49 million tonnes annually by 2030, a one-third increase from the previous forecast.

This momentum provides a significant foundation for green hydrogen-based DRI (H?-DRI), which requires only 50–80 kg of hydrogen per tonne of steel, making it a highly efficient decarbonization pathway.

Early adopters such as HBIS and Shanxi Taihang Mining are already running commercial-scale DRI units, signaling technical feasibility and a first-mover advantage. At the same time, volatile natural gas prices and increasing carbon costs are eroding the competitiveness of traditional gas-based DRI, shifting investor focus toward electrolysis-based green hydrogen solutions.

Government incentives, including tax credits, subsidies, and clean steel premiums, are further catalyzing growth, while downstream buyers from the automotive and appliance sectors commit to purchasing low-carbon steel. This convergence of policy, economics, and demand positions green DRI as a pivotal growth segment in the global steel industry's decarbonization journey.

Product Type Analysis

CDRI holds the market share of 72.6% in 2025, driven by its versatility and growing demand in steelmaking applications. Major projects, like the MIDREX Flex® plant under construction in Libya, highlight how CDRI production expands to new regions, meeting regional supply needs efficiently. This technology allows seamless fuel switching from natural gas to hydrogen, supporting green steel initiatives and pushing CDRI to the forefront of sustainable steel production.

Industrial giants such as Nucor and Dillinger leverage advanced ENERGIRON and MIDREX technologies, boosting production reliability and operational excellence, further strengthening the CDRI market.

The surge in CDRI demand also comes from its compatibility with electric arc furnace (EAF) steelmaking, which reduces carbon emissions significantly compared to traditional blast furnaces. Innovations like Vale’s iron ore briquettes and ArcelorMittal’s low-temperature electrolysis process reflect ongoing efforts to improve feedstock quality and cut CO2 output. These technological advances combined with increasing global steel production shifts are propelling CDRI as the preferred product type in the direct reduced iron market, setting the stage for steady growth and a cleaner steel future.

Process Technology Analysis

MIDREX holds a commanding 55.6% market share, driven by its proven shaft furnace design that efficiently reduces iron ore pellets and lumps into high-purity metallic iron. This process uses a precise gas mixture, mainly natural gas and hydrogen, to maintain optimal temperatures between 800°C and 1000°C, ensuring superior metallurgical quality and operational efficiency.

Its innovative gas recycling system recovers carbon monoxide, minimizing fuel use and lowering emissions, which aligns perfectly with the steel industry’s push for greener production methods. MIDREX’s adaptability to feedstock types and strong energy management make it the backbone for cold direct reduced iron production, fueling the transition toward more sustainable steelmaking worldwide.

North America Regional Analysis

North America holds the 13.4% market share driven by significant investments in direct reduced iron (DRI) production infrastructure, exemplified by U.S. Steel’s $150 million DR-grade pellet production facility at its Minnesota Ore Operations-Keetac Plant. The facility aims to supply approximately four million tons of DR-grade pellets annually, strengthening the region’s position in the tight DR pellet market.

This investment supports U.S. Steel’s metallics strategy, creating jobs and advancing sustainable iron ore supply chains within the U.S.

Canada also plays a strategic role with its large renewable energy resources and high-quality iron ore reserves, positioning it as a future leader in green iron production. The collaboration between Nippon Steel and Canadian projects such as Champion Iron’s Kami iron ore project highlights the potential for near-zero emissions ironmaking. Canada’s competitive production costs of USD 430–520 per tonne place it among the world’s lowest-cost green iron producers, offering strong prospects for North American steel decarbonization.

East Asia Regional Analysis

East Asia holds the market share of 26.7%, driven primarily by China, Japan, and South Korea’s rapid advancement in hydrogen metallurgy and low-carbon steel production. HBIS Group in China has reached a milestone by producing DRI using a 120-tonne hydrogen metallurgy project with a metallization ratio of 94%, significantly cutting CO? emissions by 800,000 tonnes annually. This hydrogen-based DRI replaces high-quality steel scrap for electric arc furnace steelmaking, marking a critical shift towards decarbonization.

Japanese steelmakers like Nippon Steel are also pioneering experimental hydrogen reduction technologies using ENERGIRON® technology, backed by government funding through NEDO. South Korea’s POSCO is advancing HyREX hydrogen-based direct reduction to produce low-carbon hot metal, while collaborations with BHP for carbon capture and utilization underscore the region’s strong commitment to achieving carbon neutrality by 2050. These innovations reinforce East Asia’s dominant position in the global DRI market.

South Asia & Oceania Regional Analysis

South Asia & Oceania hold the market share of 24.1%, led by India and Iran, which together produce over half of global DRI output. India’s DRI production, predominantly coal-based, increased by 46.2% in the past five years, reaching 49.3 million tons. Iran’s natural gas-based DRI production grew by 17.3% during the same period, contributing 33.4 million tons. These countries rely on both shaft furnace and rotary kiln technologies, with shaft furnace production rising 56% and rotary kiln output surging 161% over the last decade.

Oceania supports the global iron ore supply critical for DRI production, while countries like Saudi Arabia and Egypt add regional production capacity. The combination of growing demand for cleaner iron and increased capacity expansions in South Asia and Oceania strengthens their share in the global market. The region’s diverse technology mix and expanding steel infrastructure underpins steady market growth amid rising sustainability efforts.

The global direct reduced DRI market is consolidated in nature, with a few dominant players such as Qatar Steel, Kobe Steel Ltd, ArcelorMittal, Nucor Corporation, and Midrex Technologies Inc. These companies hold significant influence over market dynamics, pricing, and technological direction. They drive competition through capacity expansion, green transition strategies, and proprietary technology deployments.

Key players are heavily focused on decarbonization and sustainable production. Companies such as Midrex and Kobe Steel invest in hydrogen-ready DRI technologies and collaborate on projects aligned with national decarbonization goals. Nucor and Qatar Steel work toward environmental compliance by implementing CCS systems and joining global sustainability platforms.

Recent Industry Developments

• In October 2024, Dillinger and ROGESA signed a partnership with Midrex Technologies and Primetals Technologies to construct 2 million tons per year MIDREX Flex® DRI plant in Germany. The plant features hydrogen-ready infrastructure and supports over 50% CO2 emission reduction, marking a major advancement in Europe's green steel transition.
• In September 2024, Vale and Midrex Technologies signed a Technical Cooperation Agreement to implement Vale’s low-emission iron ore briquettes in MIDREX® DRI plants, offering up to 80% CO? reduction. The collaboration could evolve into a joint venture to scale the solution globally.