Rising Demand for Direct Reduced Iron in Construction Industry to Escalate North America Direct Reduced Iron Market Growth During 2022–2028
According to our latest market study on “North America Direct Reduced Iron (DRI) Market Forecast to 2028 – COVID-19 Impact and Regional Analysis – by Form (Lumps, Pellets, and Fine), Production Process (Coal Based and Gas Based), and Application (Steel Making and Construction),” the 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. The report highlights key factors driving the market growth and prominent players along with their developments in the market.
Direct reduced iron is a product obtained by the direct reduction of iron ore in the solid state by hydrogen or carbon monoxide derived from natural gas or coal. The North America direct reduced iron market is mainly driven by the need for sustainable products in the construction & infrastructure industry. In 2021, the US held the largest market share in terms of revenue. The construction industry in the US is witnessing growth due to higher government investments in residential construction projects and renovation activities. In the country, the rising awareness regarding the decarbonization of steel and the development of improved steel quality with the reduction of scrap iron fuels the direct reduced iron market growth in the US.
North America Direct Reduced Iron Market Breakdown – by Region
The North America direct reduced iron market offers many growth opportunities for steel manufacturers owing to increasing demand for green steel products in end-use industries, such as building & construction, automobile, and wind turbine, as well as the solar energy sector. The construction industry in North America is witnessing growth due to higher government investments in residential construction projects and renovation activities in the region. The DRI-produced steel is of good quality, and these steel rebars are widely used in the construction industry. Further, greater support from governments of various countries in North America toward direct reduced iron infrastructural setup and high investments in the construction sector boost the regional industry growth. The investments in establishing plant setup for the production of DRI play a major role in fuelling the direct reduced iron market. In February 2023, Ternium S.A. announced its investment amounting to US$ 2.2 billion in a new electric arc furnace (EAF) and a DRI plant with an installed capacity of 2.6 million metric tons per year and 2.1 million metric tons per year, respectively, in North America. Thus, rising investments in establishing DRI production plants bolster the growth of the market.
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 highly focused on the development of high quality and innovative product offerings to fulfil the customer’s requirements.
Impact of COVID-19 Pandemic on North America Direct Reduced Iron Market
In 2020, various industries had to slow down their operations due to disruptions in value chains caused by the shutdown of national and international boundaries. The COVID-19 pandemic caused disruptions in the supply chain of key raw materials and hampered the growth of the North America direct reduced iron market. Moreover, the shortage of manpower interrupted direct reduced iron production and distribution operations during the peak pandemic phase. Also, lockdowns imposed by governments of different countries in 2020 hampered the ability of industries to maintain inventory levels. Further, government restrictions and other COVID-19 precautions reduced the production capacities of stakeholders in the ecosystem.
Various economies in North America started reviving their operations. Manufacturers could then operate at full capacities, helping them overcome the demand–supply gap. With this, the demand for direct reduced iron has started increasing. Favorable government initiatives regarding green steel production and low carbon steelmaking technology is likely to offer lucrative opportunities for the North America direct reduced iron market during the forecast period.
The report includes the segmentation of the North America direct reduced iron market as follows:
The North America direct reduced iron market, by form, is segmented into lumps, pellets, and fines. By production process, the market is bifurcated into coal based and gas based. Based on application, the market is segmented into steel making and construction. The North America direct reduced iron market, by country, is segmented into the US and Canada.
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