The North America direct reduced iron market size was valued at US$ 1,953.20 million in 2022 and is projected to reach US$ 3,063.91 million by 2028; it is expected to record a CAGR of 7.8% from 2022 to 2028.

Direct-reduced iron, also known as sponge iron, is the product of the direct reduction of iron ore in the solid state by carbon monoxide and hydrogen derived from natural gas or coal. Steel manufacturing from direct reduced iron is considered as a sustainable way of steel production. Rising awareness regarding the adverse effects of carbon emissions and favorable government initiatives on sustainable steel product development boost market growth. The market for direct reduced iron in North America is moderately consolidated due to the presence of a few regional and international players.

In 2021, the US held the largest revenue share of the North America direct reduced iron market, and Canada is expected to register the highest CAGR from 2022 to 2028. The direct reduced iron market is competitive in the US owing to the expansion of electric arc furnace-based steel production and surge in adoption of sponge iron in construction applications. Moreover, hydrogen-based direct reduction of iron ore is gaining popularity, since hydrogen is considered low carbon alternative and a potential substitute of coke for reducing oxygen. Besides, rising demand for direct reduced iron in steel-making applications has resulted in increased imports of porous iron products in the country.

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North America Direct Reduced Iron (DRI) Market: Strategic Insights

Market Size Value in	US$ 1,953.20 million in 2022
Market Size Value by	US$ 3,063.91 million by 2028
Growth rate	CAGR of 7.8% from 2022 to 2028
Forecast Period	2022-2028
Base Year	2021

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Impact of COVID-19 Pandemic on North America Direct Reduced Iron Market

The COVID-19 pandemic has affected economies and industries in various countries due to lockdowns, travel bans, and business shutdowns. Lockdowns, travel restrictions, and business shutdowns in US and Canada hampered the growth of several industries, including steel and construction. The shutdown of manufacturing units disturbed global supply chains, manufacturing activities, delivery schedules, and various essential and nonessential product sales. Many companies announced possible delays in product deliveries and a slump in future sales of their products in 2020. Moreover, the shortage of manpower interrupted direct reduced iron production and distribution operations during the peak pandemic phase. The upheavals in the global supply chain and industrial material production facilities led to a severe spike in the prices of raw materials and production costs. All these factors hampered the steel making and construction industries in 2020 and early 2021, thereby restraining the growth of various markets related to this industry.

In 2021, various economies resumed operations as governments of several countries announced relaxation in the previously imposed restrictions, which positively impacted the global marketplace. Moreover, manufacturers were permitted to operate at full capacity, which helped them overcome the demand and supply gap. With successful vaccination drives across the world, the manufacturers of direct reduced iron are focusing on increasing their production for serving the rising consumer demand for sustainable steel products. This factor is positively impacting the North America direct reduced iron market growth.

North America Direct Reduced Iron Market Breakdown – by Region

Market Insights

Expansion of Direct Reduced Iron Plants in North America

North America has huge natural gas production facilities owing to the abundance of natural gas in the region. According to the US Energy Information Agency, the country contributes ~21–25% to global natural gas production. Natural gas has gained significant traction as a source of energy in recent times owing to its relatively clean combustion and fuel efficiency. It is a mixture of gaseous hydrocarbons mainly consisting of methane and other atmospheric gases in minor quantities. Natural gas is used as the principal raw material in the form of a reducing agent in the production of sponge iron. The major manufacturers of direct reduced iron in North America are expanding their production capacities due to the feasibility of accessing natural gas. In July 2021, ArcelorMittal, in collaboration with the Government of Canada, announced to set up a new direct reduced iron and electric arc furnace plant in the country. This facility will be capable of producing 2 million metric tons of iron, which would be used in the manufacturing of around 2.4 million metric tons of high-quality steel. Also, in June 2022, United Steel Corporation, one of the key manufacturers of steel through the electric arc furnace method, announced its plans to construct a new direct reduced iron pellets plant in Minnesota, US. Thus, strong demand for alternatives to scrap iron and the need for decarbonization of the steel industry have urged manufacturers in the region to expand their production capacity to serve the customer demand.

Application Insights

Based on application, the North America direct reduced iron market is segmented into steel making and construction. The steel making segment accounted for a larger market share in 2021. After pig iron or hot metal is produced in blast furnaces, direct reduced iron is the second most viable source of virgin iron in steel making. Natural gas-based shaft reactors for direct reduced iron production are commonly used in North America and South America, while coal-based direct reduced iron production is popular among Asian markets. According to Air Products and Chemicals, Inc., in North America, more than 60% of steel is produced through the electric arc furnace route using sponge iron as basic feed material for steel production. Rising demand for high-quality iron and steel products in steel making is anticipated to boost the market growth for the segment during the forecast period.

North America Direct Reduced Iron Market, by Application – 2021 and 2028

Nucor Corp, Cleveland-Cliffs Inc., Kobe Steel Ltd, Voestalpine AG, Ternium SA, SMS Group GmbH, JSW Steel Ltd, Tenova SpA, Liberty Steel Group Holdings UK Ltd, and Bharat Engineering Works Pvt Ltd. are a few major players operating in the North America direct reduced iron market. The North America direct reduced iron market players are constantly focusing on strategies such as investments in research and development activities and new product launches. These market players are highly focused on the development of high quality and innovative product offerings to fulfil the customer’s requirements.

Report Spotlights

• Progressive industry trends in the North America direct reduced iron market to help players develop effective long-term strategies
• Business growth strategies adopted by developed and developing markets
• Quantitative analysis of the North America direct reduced iron market from 2020 to 2028
• Estimation of demand for direct reduced iron in North America
• Recent developments to understand the competitive market scenario
• Market trend and outlook as well as factors driving and restraining the growth of the North America direct reduced iron market
• Assistance in decision-making process by highlighting market strategies that underpin commercial interest, leading to the market growth
• The size of the North America direct reduced iron market at various nodes
• Detailed overview and segmentation of the market, as well as the North America direct reduced iron industry dynamics
• Size of the North America direct reduced iron market in various countries with promising growth opportunities

North America Direct Reduced Iron Market Segmentation

By form, the North America direct reduced iron market is segmented into lumps, pellets and fine. Based on production process, the market is bifurcated into coal based and gas based. Based on application, the market is bifurcated into steel making and construction.

Company Profiles

• Nucor Corp
• Cleveland-Cliffs Inc
• Kobe Steel Ltd
• Voestalpine AG
• Ternium SA
• SMS Group GmbH
• JSW Steel Ltd
• Tenova SpA
• Liberty Steel Group Holdings UK Ltd
• Bharat Engineering Works Pvt Ltd.