Direct-reduced iron

The use of direct-reduced iron (DRI) and hot-briquetted iron (HBI) production technologies, much like ten years ago, is considered one of the most promising world metal industry trends in metallurgical literature.

In recent years, the world metal industry has made a serious step forward in both technology and production rates, however the rates of DRI are considerably lagging behind.


The use of DRI and HBI for steelmaking in electric arc furnaces allows the production of the highest quality metal with a low content of harmful impurities which can be used in both high-tech and standard industries.

The current demand for DRI and HBI is steadily growing despite the price volatility and the quality of all alternative raw materials.

However, despite the constant advertisement of relatively new technological breakthroughs, the development of the DRI and HBI processes is moving at a slow rate.

What is direct-reduced iron (DRI)?

Most of the iron used by humanity goes through the process of direct reduction.

The main and most economical method of recovering iron from its ore known is the carbothermal method of direct reduction from the ore by means of carbon-bearing materials:


The oldest and most common method is to smelt iron (pig iron) in hearths where iron ore reacts with coke carbon. Special blast furnaces and coke produced from coking coal are necessary for such a reduction. The resulting product of this process is pig iron containing iron and carbon (over 3 %). This product has a brittle nature and is not suitable for being manufactured into vital metal parts. Therefore, pig iron is used for steelmaking after removing carbon (decarburization), adding special additives (ferroalloys) and heat treatment to get steel of the required quality. There are many process variations of carbothermic reduction of iron from its ore by carbon, but it is producing pig iron in blast furnaces that is today the most effective, simple and commonly used method. Another advantage of the blast furnace process is the possibility to use low-grade iron ores. However, the blast furnace process requires extraction of coking coal, coke production, ore processing, sintering, etc. In addition to the production costs, all these aspects are related to environmental problem solving.

One of the carbothermic processes’ modification that began to rapidly develop in the 1970s is the process of iron reduction from its ore by natural gas, which involves the following chemical reactions:

CH4+H2O=CO+Н2 (conversion of natural gas)


FeХOY +H2=Fe+H2O

The metal product of the above process is direct-reduced iron (DRI) that is not contaminated with carbon, due to lack of direct interaction between ore and carbon, as well as with various impurities that could potentially come from coke. This product contains about 1 % carbon and 90 % Fe. It is also not suitable for the production of vital metal parts, and it can only be used as a raw material in steelmaking.

This gas-producing process began to grow more common in 1980, when the metal and mining sectors initiated the widespread use of natural gas for the purpose of iron reduction. Moreover, coal gasification products, oilwell gas and other gaseous products have been proved to also be usable for the direct reduction of iron.

In the 1990s, technological changes in the iron reduction processes significantly cut the volume of capital and energy consumption, which resulted in a new leap of DRI production which continues to this day. A variety of techniques, equipment and raw materials have generated a wide range of methods for DRI production, but only a few of them have passed pilot-scale tests.

All effective methods of direct reduction actually use the same process: rich iron ore (fine concentrate or pellets) is reduced by a special gas mixture up to the iron content of 85-90%.

This explains why the production of direct-reduced iron is mainly concentrated in countries with large reserves of oil (oilwell gas), natural gas and iron ore, as well as limited scrap resources. Such plants are concentrated in Latin America, the Near and Middle East.

The Midrex technology ( is a widespread practice, with facilities operating in many countries around the world. About 40 million tons of DRI are produced today using the Midrex technology, which accounts for 60 % of the total DRI production. About 60 million tons of direct-reduced iron is produced all over the world per year.

One of the major companies using the Midrex technology is Oskol Electrometallurgical Works in Russia. Four modules built and put into operation there in 1983-1987 have an output capacity of about 1.7 million tons of metallized pellets (DRI) per year.

In 1999, Lebedinsky Mining and Processing Integrated Works (Russia) launched a module for the production of hot-formed briquettes using a slightly different HYL / Energiron technology with a capacity of 0.9 million tons per year. In 2007, Lebedinsky Works implemented another module that uses the same method and has a capacity of 1.4 million tons of hot-briquetted iron (HBI) per year. Russia produces about 3.4 million tons of DRI annually.

The global production of each reduction process.

The main processes of DRI-HBI production ensure not only low sulfur and phosphorus (otherwise transferred from coal and coke), but also other impurities such as copper, lead and zinc, typical for scrap recycling. The quality of steel produced from DRI is very high.


In electrometallurgy, direct-reduced iron is exclusively used as a source of iron for steelmaking. It is a major and very serious contender for scrap and pig iron. A further DRI twist is provided by its development inextricably linked with that of electric steel production. Average annual growth rate of DRI production is estimated at 9 %, and that of the electric steel production is the same. The global pig iron production doubled over the past 10 years from 576 million tons in 2000 to about 950 million tons per year, while the DRI production increased only by 50 % from 42 to 60 million tons in 2009.

The largest DRI producers in the world are India (20 million tons), Venezuela (7.7 million tons), Iran (7.4 and Mexico (6.3 million tons). These countries account for about 60 % of the global production. These countries are also pig iron producers. Let us see how some of these countries have increased their pig iron and DRI production in recent years. Of these countries, only India and Iran have reasonable reserves of iron ore and natural gas. The DRI production was developing faster than the pig iron production in these countries to the exclusion of all others.

In the near future, it is India that may become the country leading in the DRI production. 45 % of the total steelmaking capacities in this developing country accrue to the electric furnace steelmaking capacities. Moreover, there are limited resources of metal scrap and coking coal in the country, but India is rich in high-grade iron ore and natural gas.

Russia and Kazakhstan along with India, also have natural gas, iron ore reserves and significant advantages in the development of DRI process.

Let us review the commercial aspects of the DRI production in Russia or Kazakhstan.

As mentioned above, DRI is an intermediate product for steelmaking. The main contenders for this product are cast iron and metal scrap.

1. Prices

Why pig iron is more expensive?

The answer is based on the fact that pig iron contains more carbon and gives extra heat during oxygen blowing, i. e. pig iron is more energy-valuable than DRI. And on the contrary, an additional amount of heat is needed when using DRI, because DRI contains a significant amount of the non-metallic phase.

The market DRI price is closer rather to that of scrap than to the cast iron price. Therefore, following the scrap price trend is clearly necessary for DRI marketing.

2. Product market

Russia: Russia is ramping up steel production by not more than 5 % a year, so at the moment it is well-off for scrap which is substantially cheaper than DRI, if compared by cost of production. In addition, Russia's experience with DRI used in electric furnaces demonstrates higher efficiency of scrap as compared to DRI, because DRI contains a significant amount of a non-metallic phase. DRI will be in demand in Russia only when the amount of highly contaminated scrap exceeds the critical level and a need appears to dilute scrap with virgin iron. There is another consideration why DRI may be of high demand in Russia, provided its price is lower than that of scrap. Recent data show that scrap production has reached its maximum and Russia will face a shortage of scrap in the near future.

China: China is increasing steelmaking capacities, mainly converters, where pig iron and scrap are used. DRI can be used in China's steel industry, but its price should be at the level of metal scrap. It should be borne in mind that China will use its own scrap in the future (which is still more or less clean) and have it in good supply. At present, China produces about 50 million tons of steel in electric furnaces a year, and by all means, there is always a place for the DRI product here, subject to its market price.

Other markets: One need to know that one of the major DRI disadvantages is its oxidation during transportation. That is why only 20-25 % of produced DRI is sold in the world. The rest of DRI is used in own production. DRI can potentially be used in any countries which produce steel.

Key questions:

1. Is it worth producing DRI?

Consider an alternative possibility to produce pig iron as its market is more defined.

Another choice is to build a DRI plant parallel to electric furnaces for further production of finished steel products.

2. What is more profitable — to sell iron ore raw materials or produce DRI from them that is priced by 5-10 % higher than scrap and by 5-10 % cheaper than pig iron?

Let us try to answer.

To produce 1 ton of DRI, we use 1.35 tons of iron ore raw materials, 400 m3 of natural gas and spend extra US$50-70.

To produce 1 ton of pig iron, we use 1.5 tons of iron ore raw materials, 0.5 tons of coke and and spend extra US$50-70.

Let us compare the theoretical costs of DRI and pig iron production as well as market prices of pig iron and scrap. Market prices of iron ore, coke and gas are taken into account!

Comparison of pig iron production costs (based on world prices of iron ore raw materials and coke) and the market price of pig iron (FCA manufacturer).

One can see that at almost every stage the price is above costs of pig iron production. However, to produce pig iron, coke is required which is in very short supply today. There is also a need to solve an array of environmental problems in the latter case.


It is obvious that if we apply the market prices of gas and DRI, then DRI production will not be profitable in practice.

At the moment, the price of gas for industry in Russia is around US$100 per 1,000 m3, in which case DRI costs US$295. Scrap price in Russia is about US$350, therefore DRI production is economically feasible if gas pricing is determined according to the Russian model.

As shown above, gas price is critical for DRI production. Therefore, when deciding on construction of a DRI plant, you need to understand the future gas price trends. If prices are at the global level, production will be unprofitable.


  • DRI product has enormous potential and will be in demand subject to scrap deficit and the need to produce ultra-high purity grades.
  • DRI price will always be behind that of pig iron, because pig iron is an additional source of energy for steelmaking, while DRI contains non-metallic phase and deteriorates the technical and economic performance of a furnace.
  • DRI is produced in countries with cheap gas and iron ore raw materials.
  • It does not make sense to begin construction without a clear understanding of natural gas pricing after commissioning DRI plant.
  • Another possibility is to build a DRI plant that uses gas produced from coal.
  • Parallel construction of a DRI plant and mini steel plant may be discussed.
  • It is theoretically possible to produce pig iron, but there is a need in coke which is not available in Kazakhstan.