Global demand for direct reduced iron (DRI) is expected to increase significantly over the coming decades, driven by the steel industry's decarbonization efforts, growing electric arc furnace (EAF)-based production and constraints in the availability of high-quality scrap, according to Vincent Chevrier, general manager at Midrex Technologies, Inc, speaking at the SteelOrbis Fall 2026 Conference & 95th IREPAS Meeting held in Belgrade on September 27-29. Mr. Chevrier stated that global DRI demand is expected to reach 260 million mt by 2035 and 500 million mt by 2050. More than half of global demand in 2035 is expected to come from Europe and the Middle East and North Africa (MENA) region.
According to the estimates of Midrex, EAF-based crude steel production is expected to increase by around 370 million mt between 2024 and 2035, while blast furnace-based production expansion will be largely limited to India and Southeast Asia. At the same time, the availability of high-quality scrap will become an increasingly important issue as EAF steelmaking expands. Mr. Chevrier stressed that DRI should be considered a supplement to scrap rather than a substitute, allowing steelmakers to dilute residual elements and produce higher-quality steel grades.
Structural gap between DRI production and consumption to boost trade
The Midrex official said he expects the geographical separation between DRI/HBI production and consumption to become increasingly significant. Import-dependent markets, particularly Europe and parts of Asia, are expected to rely on external DRI and HBI supplies, while production is likely to become concentrated in regions with advantages in energy, infrastructure and raw material access, including the Middle East and the Americas.
As a result, the company expects this structural gap to strengthen the role of international DRI and HBI trade. Global DRI trade was estimated at 13.2 million mt in 2025, of which around 4.4 million mt originated from Russia. According to Chevrier, demand for HBI is increasing particularly in markets transitioning from blast furnace-based production to EAF-based steelmaking, such as Europe and Japan, where energy costs are relatively high.
Chevrier highlighted HBI's suitability for international trade, pointing to its higher bulk density and lower reactivity compared to conventional DRI. These characteristics reduce yield losses and oxidation risks and make HBI suitable for long-distance ocean transportation and long-term storage.
Raw material and energy availability remain key challenges
Despite the strong growth outlook, Vincent Chevrier pointed to several factors that could limit DRI/HBI expansion. The availability of DR-grade pellet feed and pellets, the economics of renewable energy and hydrogen, and access to capital are among the main challenges. Overcapacity, trade tensions and regional conflicts were also cited as risks.
In particular, the availability of high-grade iron ore will become increasingly important as DRI production expands. Higher gangue levels in DRI require additional fluxes in EAF operations, increasing slag volumes, energy consumption and operating costs.
Meanwhile, Chevrier said the US and the MENA region are well positioned to develop metallic export hubs thanks to factors including competitive natural gas costs, renewable energy potential, available land and infrastructure and favorable logistics for importing iron ore.
