New Delhi
The production of direct reduced iron (DRI), or sponge iron, in India has grown at a compound annual growth rate (CAGR) of 8 percent, reaching 51.5 million metric tonnes (MT) in fiscal 2024, up from 34.7 MT in fiscal 2019. This growth rate surpasses the 5 percent increase in crude steel production, a report revealed on Monday.
India remains the world’s largest producer of DRI, with output expected to exceed 75 MT by fiscal 2030. Small and mid-sized producers contributed 71 percent of domestic DRI production in fiscal 2024, while large producers contributed the remainder.
Demand for DRI is primarily driven by long steel manufacturing. The share of long steel production rose from 51.5 percent in fiscal 2019 to 54.8 percent in fiscal 2024, due to increased construction and infrastructure activities. However, this trend is expected to shift over the next three years, as flat steel production is predicted to increase with large producers expanding capacity via the blast furnace-blast oxygen furnace (BF-BOF) route.
India’s DRI production relies heavily on iron ore fines/pellets, coal, and natural gas. The country produces nearly 80 percent of sponge iron through coal-based methods and the remainder through gas-based methods. Iron ore production, at 277 MT in fiscal 2024, is expected to grow at a CAGR of 7-9 percent over the next five years. Pellet production is also anticipated to rise with increased capacity and demand.
