Hot Briquetted Iron Market Size, Share & COVID-19 Impact Analysis, By Type (Fe Content 90-92% and Fe Content >92%), By Application (Electric Arc Furnaces, Blast Furnaces, Basic Oxygen Furnaces, and Others), and Regional Forecast, 2023-2030

The global hot briquetted iron market size was valued at USD 3.69 billion in 2022 and is projected to grow from USD 3.80 billion in 2023 to USD 5.82 billion by 2030, exhibiting a CAGR of 6.3% during the forecast period. Europe dominated the hot briquetted iron market with a market share of 38.21% in 2022.

Hot Briquetted Iron (HBI) is a compacted form of Direct Reduced Iron (DRI) that has been densified at elevated temperatures. It is a relatively new product in the iron and steel-making industry. The product is known for its superior physical and metallurgical properties compared to conventional iron ore pellets and lumps. When exposed to open air, direct reduced iron reacts with oxygen to re-oxidation, which limits the ability of transportation of iron ore over large distances. The briquette form of direct reduced iron is highly compacted, limiting its exposure to air. Therefore, it can be transported over great distances and used in various steel and iron processes.

COVID-19 IMPACT

Fluctuating Demand and Supply Caused by the Pandemic the Restricted Market Growth

The market faced several challenges during the COVID-19 pandemic. The demand for steel products fluctuated as construction and industrial activities slowed down globally. Production disruptions occurred as hot briquetted iron production facilities had to comply with lockdown measures, leading to reduced operations and supply chain disruptions. Implementing health and safety measures in production facilities added extra costs and impacted productivity. Logistics and transportation challenges, due to restricted movements and closed borders, affected the availability of hot briquetted iron, resulting in price volatility.

Amid the pandemic, companies also reported the postponement of their plans to build new production facilities. For instance, during the peak of the pandemic, U.S. based Cleveland-Cliffs announced that it had temporarily shut down the construction of the HBI Project in Ohio. However, as the global economy recovers from the effects of the pandemic, the steel demand is expected to grow steadily, driving the market growth during the forecast period.

HOT BRIQUETTED IRON MARKET TRENDS

Rising Emphasis on Environmentally Sustainable Iron Production to Create New Growth Opportunities

Hot briquetted iron offers an eco-friendlier alternative to traditional blast furnaces, emitting lower greenhouse gases and providing better energy efficiency. The gas-based reduction process used in HBI production reduces carbon dioxide emissions per ton of iron produced, making it an appealing choice for companies focusing on reducing their carbon footprint and complying with the strict emission standards. The industry’s shift toward sustainability is driven by stricter environmental regulations, corporate social responsibility initiatives, and consumer demand for greener products. As the HBI industry evolves, continuous advancements in technology and process optimization are expected to enhance the environmental performance of the product, strengthening its position as a more environmentally friendly option for iron production. 

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HOT BRIQUETTED IRON MARKET GROWTH FACTORS

Rising Adoption of Steel-Associated Products to Boost the Market Growth

Steel production is a global industry that requires raw materials such as iron ore or scrap. Steel is at the epicenter of delivering solutions for future energy and transportation systems, climate-resilient infrastructure, agriculture, construction & building, and others. In addition, steel plays a crucial role in the construction industry as it is used on roofs and cladding for exterior walls. Structural steel is used extensively to build residential buildings, parking garages, and industrial sheds, and in reinforcing structures. Increasing infrastructure investment and construction activities are expected to raise steel demand and drive the market.

In addition, the ongoing “Next Generation Vehicle” project, rising technological advancement in the automotive sector, and rising innovation in EVs (electric vehicles) will contribute to steel-associated product adoption. The technological development in steel products has made them more affordable and accessible over the last decade while improving longevity and corrosion resistance. The increasing consumption of steel-associated products in automotive and building & construction industries is expected to drive the market growth during the forecast period.

RESTRAINING FACTORS

High Capital Investment Along with Higher Operational Cost to Hinder the Market Growth

Operating costs and initial investment for hot briquetted iron are higher than for direct reduction plants, which are likely to restrain the market growth. HBI is a premium form of direct reduced iron typically found as pellets or lumps. Its production involves using direct reduction processes that require advanced technologies and equipment. These processes use natural gas or other reducing agents to convert iron ore into metallic iron. The initial capital investment in these technologies can be significant, which impacts the overall production cost. Moreover, setting up and maintaining the infrastructure for HBI production can be cost-intensive.

In addition, the shipping and handling involved in procuring raw materials and distributing the final product can add to the overall production cost. The product manufacturing requires substantial energy inputs, primarily in the form of natural gas or other fuels used for the reduction process. Fluctuations in energy prices can directly impact the product manufacturing cost. Moreover, the price and availability of iron ore and other raw materials used in the production process can influence production costs. These factors may hamper the growth of the market.

HOT BRIQUETTED IRON MARKET SEGMENTATION ANALYSIS

By Type Analysis

Fe Content 90-92% Segment Accounted for the Largest Share Owing to Cost-efficiency of the Products

Based on type, the market is classified into Fe Content 90-92% and Fe Content >92%.

Fe Content 90-92% accounted for dominant market share in 2022. The hot briquetted iron with a Fe content of 90-92% is amongst the majorly consumed types since it offers an ideal choice in terms of purity and cost.

At the same time, the Fe Content >92% segment is consumed in limited quantity owing to the high cost associated with each additional percentage rise.

By Application Analysis

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Rising Popularity of Electric Arc Furnaces Due to their Ability to Process Metal Efficiently to Drive Segment Growth

Based on application, the market is segmented into electric arc furnaces, blast furnaces, basic oxygen furnaces, and others.

The electric arc furnaces segment holds the largest hot briquetted iron market share globally. Electric arc furnace steelmaking is gaining popularity due to its adaptability and capability for using various feedstocks. The rising use of hot briquetted iron in electric arc furnaces is driven by its higher iron content and lower impurities, which enhances productivity and contributes to a smaller environmental footprint.

HBI is used in blast furnaces owing to advantages such as lower emission of CO₂, increased productivity of blast furnace, and reduced coke rate.

REGIONAL HOT BRIQUETTED IRON MARKET ANALYSIS

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Europe hot briquetted iron market accounted for a significant market size of USD 1.41 billion in 2022. In Europe, the increasing product demand is linked to the rapid growth of the automotive industry. In addition to complex structural designs, several automotive companies and OEMs are employing newer processes and innovative technologies to incorporate steel in the automotive. In addition, the Europe market is expected to witness a significant growth rate over the forecast period. This is due to the increasing demand for steel products from the building & construction industry.

Asia Pacific is witnessing a significant growth rate. A major factor driving the market is the growing steel industry. Increasing demand from end-user sectors such as automotive, construction and infrastructure, home appliances, and aerospace in the developing countries of China, India, and Japan is a major factor driving the growth of the steel industry. This is expected to positively influence the Asia Pacific market. In recent years, the construction sector has grown significantly. Growth in residential construction is expected to boost the construction industry, which is expected to drive the market expansion to a considerable extent. Growing steel consumption in the Asia Pacific region and the expanding construction sector are the driving factors for the region.

North America is a well-established market and the growing steel industry is a major factor driving the market in the region. Steel is extensively used in multiple applications, including industrial machines, appliances, oil & gas, automotive, and construction. In the U.S., the construction sector accounts for 4% of the GDP and the demand for construction products is increasing from both the residential and commercial sectors. This boosts the steel consumption from major end-use industries and is expected to drive the regional market growth.

The Latin America construction market is set to grow at a significant rate over the study period. The increasing demand for infrastructure and real estate coupled with government projects such as the Vaca Muerta pipeline drives the market in Latin America. The rising focus of the government on improving automotive and industrial production activities will boost the hot briquetted iron market growth in the region. The spike in construction activities in emerging countries such as Chile, Brazil, Mexico, and others is further expected to drive the market expansion.

The Middle East & Africa market is expected to grow moderately during the forecast period due to the rapid growth of the residential building sector in Egypt, Kenya, Nigeria, and Ethiopia. The product demand is also set to rise driven by the ongoing construction boom in Saudi Arabia, Qatar, and the UAE. In addition, the operating costs and initial investment for direct reduction plants are lower than those for integrated steel plants. Therefore, these plants are becoming increasingly popular in the region. Such factors are anticipated to drive the market growth during the forecast period.

KEY INDUSTRY PLAYERS

High Technical Expertise and Capital Intensive Nature of Industry to Create Entry Barriers for New Entrants 

The competitive landscape is highly consolidated, with limited players accounting for a large market share. There are existing players with well-established operational production facilities. These players benefit from economies of scale and established supply chains, making it difficult for new entrants to compete effectively. For existing players, the market is influenced by various factors including pricing strategies, product quality, technological advancements, and access to key markets. These existing players can create a competitive edge by maintaining product quality and consistency and focusing on environmental considerations.

LIST OF KEY COMPANIES PROFILED IN REGIONAL HOT BRIQUETTED IRON MARKET:

• METALLOINVEST MC LLC (Russia)


• Voestalpine Group (U.S.)


• Cleveland-Cliffs Inc. (U.S.)


• ArcelorMittal (Luxembourg)


• Libyan Iron and Steel Company (Libya)


• Orinoco Iron S.C.S. (Venezuela)


• QATAR STEEL (Qatar)


• COMSIGUA CA (Venezuela)


• Jindal Shadeed Iron & Steel LLC (Oman)


• JSW Group (India)

KEY INDUSTRY DEVELOPMENTS:

• January 2023: Metalloinvest MC LLC has increased the production capacity of HBI-3 by 3%. The company's capacity is more than 2 million tons of briquettes annually. Such expansion would help the company capture more market by fulfilling their demand in a short time.


• April 2022: ArcelorMittal acquired 80% shareholding in Voestalpine’s world-class Hot Briquetted Iron (‘HBI’) plant located in Corpus Christi, Texas. This acquisition would help the company to strengthen its position and guarantee the security of supply to ArcelorMittal facilities, including AM/NS Calvert in Alabama.

REPORT COVERAGE

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The research report provides both qualitative and quantitative insights on the global market. Quantitative insights include market sizing in terms of value (USD Billion) and volume (Kilo Tons) across each segment, sub-segment, and region profiled in the scope of study. Furthermore, it provides market analysis and growth rates of segments, sub-segments, and key counties across each region. The qualitative insights cover the elaborative analysis of key market drivers, restraints, growth opportunities, and industry trends related to the market. The competitive landscape section covers detailed profiling of the key players operating in the industry.

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