The global market for direct reduced iron (DRI) is currently valued at approximately US$ 8,249.0 million, with projections indicating a substantial growth trajectory. Forecasts suggest that by the year 2030, the market is poised to reach an impressive valuation of US$ 16,789.0 million, reflecting a robust Compound Annual Growth Rate (CAGR) of 8.2% between 2022 and 2030. This anticipated expansion underscores the increasing demand and significance of direct reduced iron in various industries, driven by factors such as economic development, infrastructure projects, and the growing prominence of DRI as a key raw material in steel production processes.
While increasing steel production capacities in China, India and some Middle Eastern countries account for the amplifying DRI demand, the COVID-19 pandemic has led to disruptions across end-use industries, thereby impeding demand for steel. Ban on steel scrap imports are significantly steering sales of DRI amid the global coronavirus outbreak. Surplus supply, and low demand and high storage volumes will result in considerably falling steel production in near term, ultimately affecting the demand for DRI.
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Manufacturers based in the Middle East are aggressively expanding their DRI production capacities in response to the growing steel demand within region. This would help the regional industry reduce its dependence on imports and emerge as self-reliant in terms of raw material procurement.
Key Takeaways from DRI Market Study
- Gas-based production process to remain as the go-to option among manufacturers, especially in North America, Europe and Middle East, due to lower natural gas prices
- Coal-based production is dominated by India, which accounts for almost 80% of the DRI produced through coal-based process
- Pellets are the most preferred among DRI form type, as they are easy to transport, have better reactivity and are cost effective than lumps
- Over the recent past, DRI imports have been witnessing a steady rise despite facing stern competition from hot briquetted iron (HBI); the latter has low reactivity and is subject to lower transportation costs
- Vertical integration strategies adopted by steel manufacturers to produce DRI at their own facilities would remain an impending trend in the near future
DRI Market: Key Participant Insights
While DRI will not replace scrap steel as the primary raw material for steel production, it is projected to be utilized as a key ingredient and in higher proportions. In addition, the growing demand for high quality steel products is further expected to drive DRI demand. Most of the leading tier-1 manufacturers in the DRI market, like ArcelorMittal, SIDOR, Jindal Steel, Mobarakeh Steel and Nucor, use most of their production for captive consumption and the rest for exports to major steel manufacturers around the world. Capacity expansions are also one of the primary focus of the globally leading manufacturers to stay ahead of the competition.
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Direct Reduced Iron (DRI) Market: Segmentation
Production Process
- Coal-based
- Gas-based
Application
- Steel Production
- Construction
Form
- Lumps
- Pellets
Region
- North America
- Latin America
- Europe
- South Asia & Pacific
- East Asia
- Middle East and Africa
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