Direct reduced iron price index

Direct reduced iron price December 2025 and outlook (see chart below)

• India:US$2.94/KG, 1% up

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Direct reduced iron price index

This post is a summary of the Direct reduced iron price developments. The price developments of Direct reduced iron are expressed in US$ prices converted FX rates applicable at the time when the price was valid. Direct reduced iron price index developments are calculated from multiple separate sources of data to ensure statistical accuracy.

The outlook for Direct reduced iron prices is generated from different inputs including:

• Very recent price developments of immediate cost drivers of Direct reduced iron prices
• Recent price developments of underlying feedstocks which drive the price of Direct reduced iron
• Market futures for both cost drives and feedstocks of Direct reduced iron prices
• Adjustment of current supply/demand imbalances in the Direct reduced iron market
• Longer term trends in likely demand conditions

What is Direct Reduced Iron and What is it Used For

Direct Reduced Iron (DRI) is a form of iron produced by reducing iron ore in its solid state, without melting it as in traditional blast furnace methods.
It is also known as sponge iron due to its porous structure. DRI is primarily used as a feedstock in electric arc furnaces (EAFs) and induction furnaces
to produce high-quality steel. It helps steelmakers control the composition of steel more precisely and reduces dependence on scrap metal.

How is Direct Reduced Iron Produced

DRI is produced by passing a reducing gas—usually a mixture of hydrogen and carbon monoxide—through iron ore pellets or lumps at temperatures between
800°C and 1,050°C. This process removes the oxygen from the ore, leaving behind nearly pure metallic iron. The reducing gas is commonly derived from
natural gas or, increasingly, from hydrogen in low-carbon processes. The resulting product can be used immediately in steelmaking or compacted into
Hot Briquetted Iron (HBI) for safer transport and storage.

How Large is the Global Market for Direct Reduced Iron

The global Direct Reduced Iron market is significant and expanding, driven by the growth of electric arc furnace steelmaking and efforts to reduce
carbon emissions. As of 2024, global DRI production exceeded 130 million tonnes per year, with market value estimated at over USD 40 billion.
Demand is expected to rise as the steel industry transitions to cleaner production technologies using hydrogen-based DRI.

Where is Direct Reduced Iron Produced

DRI production is concentrated in regions with abundant natural gas supplies, which are used as the main reducing agent. The largest producers include
India, Iran, and countries in the Middle East such as Saudi Arabia and Qatar. Mexico and Russia are also significant producers, while new capacity is
emerging in North America and Europe as part of the shift toward low-carbon steelmaking.