Direct Reduced Iron (DRI) Market

2020 Analysis and Review of Direct Reduced Iron (DRI) Market by Production Process - Coal-based and Gas-based for 2020 - 2030

  • 2020-05-28
  • REP-GB-11635
  • 32 Tables
  • 126 Figures
  • 300 pages
  • Format: PDF/PPT/Excel

An Incisive, In-depth Analysis on the Direct Reduced Iron Dri Market

This study offers a comprehensive, 360 degree analysis on the Direct Reduced Iron Dri market, bringing to fore insights that can help stakeholders identify the opportunities as well as challenges. It tracks the global Direct Reduced Iron Dri market across key regions, and offers in-depth commentary and accurate quantitative insights. The study also includes incisive competitive landscape analysis, and provides key recommendations to market players on winning imperatives and successful strategies.

Direct Reduced Iron (DRI) Market Outlook & Key Findings

  • As direct reduced iron significantly lowers the need for batch charges that eventually raises the overall cost-efficiency and productivity of the process, DRI remains among the favored feed for electric arc furnaces (EAF)
  • DRI market is set for 7% growth in 2021, as rise in EAF steel production is set to drive the consumption of DRI
  • Increasing concerns regarding reduced COemissions and improved steel quality would further steer DRI demand
  • High steel scrap prices to drive the adoption of DRI in steel making process
  • Low natural gas prices and growing steel production capacities in the Middle East to uplift opportunistic potential of the region
  • High reactivity of DRI and add-on costs associated with shipping remain as key challenges for manufacturers, as they cut down the profit margins by 5-10%   

DRI Market Analysis: Positive Prospects in Steel Making Landscape

Steel manufacturers are shifting the mode of steel manufacturing, from blast oxygen furnace (BOF)/blast furnace (BF) to EAF, to improve the quality of steel, enhance profit margins and reduce CO? emissions. EAF uses DRI as a supplement in the production of steel, unlike BOF producers who use only iron ore and steel scrap. DRI enables steel manufacturers to produce low-cost carbon steel for manufacturing of high-quality flat products that meet the most exacting specifications. In addition, surging steel scrap prices and restrictions on scrap imports have been elevating prospects of DRI in global steel making landscape.

Weakening Scrap Supplies Augur Well for DRI

Temporary shutdowns of DRI production plants and suspension of operations amid COVID-19 pandemic are leading to prevention of DRI shipments to the US and other key markets. Lags in supply chains have been resulting in tight supply of prime scrap, which will most likely continue over the next quarter. With supply chains experiencing severe alterations that influence industrial scrap generation, manufacturing activities, and demand for finished steel, it has become imperative for steelmakers to reduce reliance on prime scrap and be open to other available alternatives. DRI, being one of those substitutes in addition to pig iron and hot briquetted iron (HBI), is thus set for accelerating demand in near term. As more number of steel making companies prioritize countervailing thinning prime scrap supplies at domestic levels, FMI’s analysis projects an optimistic growth outlook for the direct reduced iron market.

Rising scrap steel prices and scarcity of steel scrap from domestic sources have been the major factors driving steel producers to opt for DRI. In addition, regulations against scrap steel imports and anti-dumping duties in developing countries like India are compelling steel manufacturers to turn to domestic sources of scrap, preferably DRI, in steel making process. On the other hand, steel industry has been growing at a rapid pace, especially in India, China, and Middle Eastern countries, with production capacities set to grow twofold by the end of this decade. The growth in steel production, especially through EAF process, is anticipated to present lucrative market opportunities for DRI players over the course of forecast period.

DRI Remains a Demanding Space for New Market Entrants

The DRI market is largely dominated by steel industry juggernauts such as ArcelorMittal, QATAR STEEL, AM/NS India, and NUCOR. High capital expenditure, industry know-hows and a vast supply chain network spanning continents collectively make it a demanding market space for new entrants. High MES (minimum efficient scale) is however presenting significant barriers to the entry of new companies in DRI landscape, eventually leading to a closed market for new entrants. FMI’s analysis suggests that the existing steel industry players that would opt for vertical integration strategies in the immediate future may discover greater profits in the market over the foreseeable future.

The share of DRI in terms of the production process varies in key markets. The above Mekko chart represents an elucidated view of the production process-wise share of DRI in 5 key countries, including the US, India, China, Saudi Arabia, and Oman. The share of gas-based DRI production process is higher compared to its coal-based counterpart, particularly in India and Saudi Arabia. Producers in China however continue to adhere to coal-based process for DRI production.

Region-wise Analysis - End of Dormancy for China Soon?

India and Middle Eastern countries have been leading the pack in terms of DRI production, accounting for more than 50% of the global production. A similar trend will continue in terms of consumption as well, given the hefty steel production capacities of Middle Eastern and South Asian regions. On the other hand, the US and some of European countries also represent highly lucrative markets for DRI manufacturers, owing to increasing stringency of environmental regulations and falling natural gas prices. China still remains a significantly cramped market owing to continued adoption of BOF/BF processes, but the tightening regulations set by Chinese government and bans on steel scrap imports are most likely to offer the much-needed push to DRI market in China, probably during the latter half of the following decade.

Leading Suppliers in DRI Market

While the DRI market landscape is currently controlled by a number of existing players, the near future is more likely to witness emergence of new steel manufacturers that are currently investing in vertical integration of their businesses. Banking on the ability to satisfy own demand, and backed by consistently falling raw material procurement costs, DRI manufacturers are witnessing promising growth avenues, especially in the Middle East. Some of the key players in global DRI market include,

Americas

  • ArcelorMittal
  • Ferrominera Orinoco (FMO)
  • Venezolana de Prerreducidos Caroní C.A. (Venprecar)
  • NUCOR

Europe & Middle East

  • Mobarakeh Steel Company
  • Khouzestan Steel Company
  • Tosyal? Holding
  • METALLOINVEST MC LLC

Asia Pacific

  • JSW
  • AM/NS India
  • Tuwairqi Steel Mills

*The list is not exhaustive, and only for representational purposes. Full competitive intelligence with SWOT analysis available in the report

DRI: The Way Forward

The long-term projections of DRI market remain buoyant, with revenues estimated to grow at over 8% through 2030. Industry’s shift towards adoption of EAF steel making is expected to gain momentum in the first half of the decade, thereby paving the way for new market opportunities for DRI manufacturing companies. Although countries with rich coal reserves and high natural gas prices would remain majorly dependent on BOF/BF processes, the US and some Middle Eastern countries are well positioned to lead the way in EAF steel making and DRI consumption. DRI is expected to be face stern competition from HBI in the near future, particularly in case of imports, due to HBI’s relatively low reactivity and high transportation costs. However, going by the historic trends, DRI will remain the preferred choice of raw material among a majority of steel manufacturers across the world.

The industry has been putting greater emphasis on lowering emissions from steel and iron production plants, which is making a room for emergence of innovative low-emission production processes. Electricity, natural gas, and hydrogen are being considered as the potential substitutes for coke and coal used in blast furnaces. Studies are underway to trial DRI production on green hydrogen. The goal is challenging, but the global sustainability drive demands energy efficiency and a circular economy in the industry.

A recent market study published by FMI on the DRI market includes the global industry analysis of 2015-2019 & opportunity assessment for 2020-2030, and delivers a comprehensive assessment of the most important market dynamics. Our analysts conduct thorough research on the historical as well as current growth parameters of the market to obtain growth prospects with maximum precision.

Direct Reduced Iron (DRI) Market: Segmentation

Production Process

Application

Form

Region

  • Coal-based
  • Gas-based
  • Steel Production
  • Construction
  • Lumps
  • Pellets
  • North America
  • Latin America
  • Europe
  • South Asia & Pacific
  • East Asia
  • Middle East and Africa

Report Chapters

Chapter 01 - Executive Summary

The report initiates with the executive summary of the market, which includes a summary of the key findings and statistics of the market. It also includes the demand & supply-side trends pertaining to the market.

Chapter 02 - Market Overview

In this chapter, readers can find the definition and a detailed taxonomy of the DRI market, which will help them understand the basic information about the market. Along with this, comprehensive information about is provided in this section. This section also highlights the inclusions and exclusions, which help readers understand the scope of the market report.

Chapter 03 - Key Success Factors

This section includes key successful factors and strategies adopted by key market participants.

Chapter 04 - Global Market Demand Analysis 2015-2019 & Opportunity Assessment 2020-2030

This section explains the global market value analysis and forecast for the market for the forecast period of 2020-2030. This chapter includes a detailed analysis of the historical market, along with an opportunity analysis for the future. Readers can also find the absolute $ opportunity for the current year (2019), and an incremental $ opportunity for the forecast period (2019-2029). Along with this, pricing analysis of the market at the regional level has been provided in this section. This section also explains the global market volume analysis and forecast for the DRI market in the forecast period of 2020-2030.

Chapter 05 - Pricing Analysis

This chapter explains key macroeconomic factors that are expected to influence the growth of the DRI market over the forecast period. Along with the macroeconomic factors, this section also highlights supply chain, forecast factors, and value chain analysis for the market. Moreover, in-depth information about the market dynamics and their impact analysis on the market have been provided in the successive section.

Chapter 06 - Pricing Analysis

The pricing analysis section of the report gives detailed pricing details of product by form across the regions. Readers will also be able to understand the weighted average pricing across the regions throughout the forecast period.

Chapter 07 - Global Market Analysis 2015-2019 & Opportunity Assessment 2020-2030 by Application

This chapter provides details about the market on the basis of application and has been classified into steel production and construction. In this chapter, readers can understand the market attractiveness analysis based as well.

Chapter 08 - Global Market Analysis 2015-2019 & Opportunity Assessment 2020-2030 by Production Process

This chapter provides details about the DRI market based on material and has been classified into coal-based and gas-based production process.

Chapter 09 - Global Market Analysis 2015-2019 & Opportunity Assessment 2020-2030 by Form

This chapter provides details about the market based on material and has been classified into lumps and pellets.

Chapter 10 - Global Market Analysis 2015-2019 & Opportunity Assessment 2020-2030 by Region

This chapter explains how the DRI market will grow across various geographic regions such as North America, Latin America, Europe, South Asia & Pacific, East Asia and the Middle East & Africa (MEA).

Chapter 11 - North America Market Analysis 2015-2019 & Opportunity Assessment 2020-2030

This chapter includes a detailed analysis of the growth of the North America DRI market, along with a country-wise assessment that includes the U.S., and Canada. Readers can also find the pricing analysis, regional trends, and market growth based on material and countries in Americas.

Chapter 12 - Latin America Market Analysis 2015-2019 & Opportunity Assessment 2020-2030

Important growth prospects of the DRI market based on its end users in Latin American countries such as Brazil, Mexico, and the Rest of Latin America. Along with this, an assessment of the market across target segments has been provided.

Chapter 13 - Europe Market Analysis 2015-2019 & Opportunity Assessment 2020-2030

Important growth prospects of the DRI market based on its end users in several countries such as Germany, France, the U.K., Russia, BENELUX, Italy, and the Rest of Europe are included in this chapter.

Chapter 14 - South Asia & Pacific Market Analysis 2015-2019 & Opportunity Assessment 2020-2030

This chapter highlights the growth of the market in Asia Pacific by focusing on India, ASEAN, Bangladesh and the Rest of South Asia. This section also helps readers understand the key factors that are responsible for the growth of the DRI market in South Asia & Pacific.

Chapter 15 - East Asia Market Analysis 2015-2019 & Opportunity Assessment 2020-2030

This chapter highlights the growth of the DRI market in East Asia by focusing on China, Japan, and South Korea. This section also helps readers understand the key factors that are responsible for the growth of the Market in East Asia.

Chapter 16 - MEA Market Analysis 2015-2019 & Opportunity Assessment 2020-2030

This chapter provides information about how the DRI market will grow in major countries in the MEA region such as GCC, KSA, Turkey, South Africa, and Rest of MEA, during the forecast period of 2020-2030.

Chapter 17 - Market Structure Analysis

In this chapter, readers can find detailed information about the tier analysis and market concentration of key players in the market, along with their market presence analysis by region and product portfolio.

Chapter 18 - Competition Analysis

In this chapter, readers can find a comprehensive list of all the prominent stakeholders in the market, along with detailed information about each company, which includes company overview, revenue shares, strategic overview, and recent company developments. Some of the market players featured in the report are ArcelorMittal, Mobarakeh Steel, Qatar Steel, Hadeed, SIDOR, Khouzestan Steel Co., Jindal Steel & Power, Gol-e-Gohar and Nucor among others.

Chapter 19 - Assumptions and Acronyms

This chapter includes a list of acronyms and assumptions that provides a base to the information and statistics included in the report.

Chapter 20 - Research Methodology

This chapter help readers understand the research methodology followed to obtain various conclusions as well as important qualitative and quantitative information about the DRI market.

Sources and Primary Research Splits (%)

Industry Interactions

  • C - Level Executives
  • Marketing Directors
  • Product Managers
  • Engineers
  • Business Development Officers
  • Production Managers
  • Procurement Heads
  • Sales Executives
  • Distributors
  • Traders
  • Raw Material Suppliers
  • Industry Experts
  • End Users
  • Current market dynamics and challenges
  • Yesteryear trends
  • Market characteristics
  • Market performance and growth quadrants
  • Competition structure and market structure
  • Strategic growth initiatives
  • Near-term and long-term market growth prospects
  • Market segment splits and authenticity
  • Opinions on market projections and validity of assumptions

Primary Interview Splits dri market designation

References Catalogue

  • Industry Publications
  • Industry Associations
    • India Brand Equity Foundation (IBEF)
    • International Monetary Fund (IMF)
    • International Steel Statistics Bureau (ISSB)
    • International Iron Metallics Association (IIMA)
    • IEA
    • Midrex Technologies
  • Factiva
  • Company Press Releases
  • Annual Reports and Investor Presentations
  • Research Papers
  • Government Websites and Publications
  • Trade Websites

Primary Interview Splits dri market stakeholder

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