Europe Hot Briquetted Iron Market Size, Share & Industry Analysis, By Type (Fe Content 90-92% and Fe Content >92%), By Application (Electric Arc Furnaces, Blast Furnaces, Basic Oxygen Furnaces, and Others), By End-use Industry (Automotive, Construction & Infrastructure, Aerospace, Nuclear, Pharmaceutical, and Others) and Country Forecast, 2025-2032

The Europe Hot Briquetted Iron market size was USD 1.68 billion in 2024. The market is projected to grow from USD 1.79 billion in 2025 to USD 2.84 billion by 2032 at a CAGR of 6.8% during the forecast period.

Hot Briquetted Iron (HBI) is a compacted form of Direct Reduced Iron (DRI), designed for safer handling, storage, and transport. It is produced by reducing iron ore pellets in a shaft furnace with natural gas-based reducing gases, primarily hydrogen and carbon monoxide, which remove oxygen to create metallic iron. While still at high temperature, the porous DRI is compressed under intense pressure into dense briquettes, reducing risks of re-oxidation and spontaneous combustion. With high metallization and uniform quality, HBI is widely used as a clean, reliable feedstock in steelmaking, offering a stable alternative to scrap and enhancing efficiency in electric arc and blast furnaces. Metalloinvest MC LLC, ArcelorMittal, NLMK Group and Voestalpine Group are the key players operating in the market.

EUROPE HOT BRIQUETTED IRON MARKET TRENDS

Policy Pressure & Regulatory Support Propel Market Growth

Policy-driven momentum is significantly accelerating the Europe hot briquetted iron market growth. Europe’s ambitious decarbonisation agenda, reinforced by measures such as the Carbon Border Adjustment Mechanism and stricter steel import safeguards, is pushing steelmakers to adopt cleaner raw materials such as HBI. At the same time, rising demand for green steel and the gradual phase-out of traditional blast furnaces are steering the industry toward renewable-powered direct reduction technologies. Together, these regulatory pressures and sustainability goals are creating a favorable environment for HBI integration. As a result, steel producers across Europe are increasingly viewing hot briquetted iron as a strategic feedstock, supporting both market expansion and long-term investment in local production facilities, driving market growth in tandem.

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MARKET DYNAMICS

MARKET DRIVERS

Rising Adoption of Steel-Associated Products to Boost Market Growth

Rising adoption of steel-associated products is set to be a major growth driver for the hot briquetted iron market. Demand across construction, automotive, machinery, and renewable energy sectors is accelerating the need for consistent, high-quality steel, positioning hot briquetted iron as a critical feedstock. In construction and infrastructure, Europe green transition projects, such as wind farms, rail networks, and smart grids, require durable long and flat steel, where HBI enhances quality while reducing emissions. In addition to this, the automotive sector’s pivot to lightweight, low-emission vehicles further reinforces reliance on green steel inputs. For steelmakers, HBI offers both performance and regulatory alignment with Europe’s decarbonisation agenda, creating a strong demand and driving market growth.

MARKET RESTRAINTS

Higher Operational Cost and Initial Investment are Anticipated to limit Market Growth

Higher operational costs and substantial upfront investment requirements are set to act as constraints on the growth of the hot briquetted iron market. Transitioning from traditional blast furnaces to direct reduction plants, often powered by renewable energy, requires significant capital expenditure in new infrastructure, advanced technologies, and supply chain realignment. In addition to this, operational costs remain elevated due to higher energy prices in Europe compared to other regions, alongside expenses for carbon compliance and sustainability reporting. For many steelmakers, these financial pressures can slow down large-scale adoption of hot briquetted iron despite regulatory support. Careful financial structuring and strategic partnerships will be essential to overcome these hurdles.

MARKET OPPORTUNITIES

Rising Emphasis on Environmentally Sustainable Iron Production Is Fueling Growth Opportunities

The rising emphasis on environmentally sustainable iron production is reshaping Europe’s steel value chain and creating significant growth opportunities for hot briquetted iron. Policymakers are tightening carbon regulations and incentivizing low-emission technologies, compelling steelmakers to pivot away from traditional blast furnace operations toward cleaner, direct reduction methods. HBI plays a pivotal role here, offering consistent quality, lower impurities, and a reduced carbon footprint when paired with renewable energy in Electric Arc Furnaces. Furthermore, growing end-user demand for “green steel,” particularly from automotive, construction, and infrastructure sectors, strengthens the business case for hot briquetted iron adoption. For investors and producers, this shift represents a strategic window to secure competitive advantage, diversify supply chains, and capture value in Europe’s transition to sustainable steelmaking.

MARKET CHALLENGES

High Natural Gas Prices Drive up HBI Production Costs in Europe

High production costs remain one of the most pressing challenges for the market in Europe. Unlike regions with abundant and low-cost natural gas, Europe faces structurally higher energy prices, driven by limited domestic reserves, heavy reliance on imports, and volatility in global energy markets. Since natural gas or renewable hydrogen constitutes the largest share of direct reduction operating expenses, these elevated costs make European HBI less competitive compared to suppliers from the Middle East, North Africa, or Latin America. Moreover, as the industry transitions to green hydrogen, the current high cost of electrolytic hydrogen further exacerbates production expenses, potentially delaying large-scale deployment of competitive, low-carbon hot briquetted iron within Europe.

SEGMENTATION ANALYSIS

By Type

Fe Content 90-92% Segment to Hold Major Market Share Owing to its Growing Use in Steel Production

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

The Fe Content 90-92% segment is expected to hold the largest Europe hot briquetted iron market share in revenue during the forecast period. Hot briquetted iron with an iron content of 90–92% is a mid-grade briquetted iron product derived from the direct reduction of high-quality iron ore pellets. This grade offers consistent chemistry and sufficient purity to serve as a substitute for scrap in electric arc furnaces and as a supplement in blast furnace operations.

While it contains minor impurities compared to higher-grade HBI, it remains a stable, reliable input that improves steelmaking efficiency and reduces dependency on fluctuating scrap supply.

In Europe, a major driver for this grade is cost competitiveness, as it provides an economically viable option for steelmakers balancing feedstock quality with affordability, especially in regions where scrap availability is limited or expensive.

Hot briquetted iron with Fe Content >92% represents a high-grade product designed to meet demanding steelmaking requirements, particularly for specialty applications. Produced from high-purity iron ore and compacted under controlled conditions, this type delivers exceptional metallization, low impurities, and uniform quality. Its higher iron yield translates into better furnace productivity, reduced slag generation, and lower energy consumption during steel production.

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By Application

HBI Demand Surges as Electric Arc Furnaces Drive Europe’s Shift to Low-Carbon Steelmaking

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

The electric arc furnaces segment is anticipated to hold the dominant share during the forecast period. Electric Arc Furnaces are the growing application for HBI, driven by the rising need for high-quality, low-residual feedstock amid volatile scrap availability. HBI offers predictable chemistry, and consistent quality, improving productivity and reducing refining costs. As Europe accelerates its shift toward electric steelmaking to cut carbon emissions, steelmakers are likely to rely more on HBI to complement scrap and ensure uniform steel grades. Europe’s climate targets, coupled with the demand for specialty steels in various end-use industries, are pushing EAF operators to secure HBI as a sustainable, reliable input material, driving market growth in tandem.

In Blast Furnaces, demand for HBI is driven by the need to lower coke consumption, reduce emissions, and enhance furnace efficiency. When charged alongside iron ore and coke, HBI improves permeability, decreases slag volume, and provides higher iron yield per unit of input. With Europe decarbonisation policies targeting conventional BF operations, steelmakers are increasingly incorporating HBI to reduce their carbon footprint while maintaining competitiveness.

By End-Use Industry

HBI Demand in Europe Driven by Construction & Green Infrastructure Expansion

Based on the end-use industry, the market is segmented into automotive, construction & infrastructure, aerospace, nuclear, pharmaceutical, and others.

The construction & infrastructure segment is anticipated to hold the dominant share during the forecast period. Europe’s construction and infrastructure sector drives HBI demand through its reliance on long and flat steel products for buildings, bridges, rail, and energy infrastructure. Consistent supply of strong, durable steel is critical to meeting Europe urban development and green infrastructure goals. HBI’s role in providing high-quality iron ensures reliable steel production with reduced emissions, aligning with Europe’s sustainability mandates. With public investment flowing into energy transition projects, such as wind farms, grids, and transport networks, HBI adoption is reinforced as a dependable feedstock that balances steel quality, cost, and environmental performance for large-scale infrastructure development.

In Europe’s automotive sector, HBI demand is fueled by the need for high-quality, low-impurity steel to meet strict safety, light weighting, and sustainability standards. Automakers also face pressure to decarbonize supply chains under EU regulations, pushing steelmakers to use HBI as a clean feedstock. The rise of electric mobility further amplifies the need for specialty steels, particularly for battery housings and high-strength components, positioning HBI as a strategic enabler of both quality and low-carbon automotive manufacturing in Europe, driving market growth in tandem.

EUROPE HOT BRIQUETTED IRON MARKET COUNTRY-LEVEL OUTLOOK

By country, the market is segmented into Germany, France, U.K., Italy, Spain, Bulgaria, Poland, Slovakia, Belgium, Russia, and Rest of Europe.

Germany

Germany is expected to dominate the market during the forecast period. Germany’s HBI demand is driven by its strong automotive and engineering sectors, which require high-quality steel. As Europe’s largest steel producer, Germany is rapidly shifting to low-carbon steelmaking, with EAF capacity expansions relying on HBI as a scrap substitute. Regulatory pressure from the Europe Green Deal and customer demands for green automotive supply chains push German steelmakers to adopt HBI to cut CO₂ emissions while maintaining consistent quality. In addition to this, Germany’s leadership in advanced steel technologies and renewable-energy-linked infrastructure further increases reliance on HBI as a strategic feedstock, driving market growth.

COMPETITIVE LANDSCAPE

Key Industry Players

Intensifying Competition among Key Players to Shape Europe’s Transition to Green HBI Market

Competition in Europe’s hot briquetted iron market is growing as companies strive to adapt to stricter climate rules and rising demand for green steel. Local players such as Voestalpine, ArcelorMittal, and Salzgitter AG are making big investments in cleaner DRI-based EAF technologies integrated with HBI production, aiming to balance sustainability with cost efficiency. At the same time, Europe faces strong competition from suppliers including Metalloinvest (Lebedinsky GOK), which continues to supply the major countries. This mix of local innovation and external pressure is creating a highly competitive environment where players must innovate to stay ahead.

LIST OF KEY EUROPE HOT BRIQUETTED IRON COMPANIES PROFILED

• METALLOINVEST MC LLC (Russia)
• ArcelorMittal S.A. (Luxembourg)
• JSW Steel (India)
• Voestalpine Group (Austria)
• GravitHy (France)
• Salzgitter AG (Germany)
• Cleveland-Cliffs Inc. (U.S.)
• Tosyali Holding (Turkey)
• NLMK Group (Russia)
• Kobe Steel Ltd (Japan)

KEY INDUSTRY DEVELOPMENTS

• November 2024 – Rio Tinto has partnered with GravitHy to support the company’s steel decarbonisation project in France. This collaboration involves Rio Tinto supplying high-grade iron ore pellets from Canada and managing the sales and marketing of GravitHy's ultra-low carbon HBI.
• October 2024 – JSW Steel and POSCO are collaborating on eco-friendly steel production, including the potential for HBI production in India, where JSW is a significant HBI importer. This partnership could involve joint ventures and technology transfer, particularly focusing on hydrogen-based steelmaking.
• January 2023 –Metalloinvest has increased the production capacity of its HBI-3 plant at the Lebedinsky GOK (mining and concentrating complex) by 3%, reaching over 2 million tons of HBI per year. This was achieved through a modernization project that involved replacing 540 reaction pipes with new, more durable ones, and optimizing the plant's equipment for increased efficiency and reduced downtime. This expansion will help the company to capture more market share in the HBI market.
• July 2022 – ArcelorMittal has acquired an 80% stake in voestalpine's state-of-the-art HBI facility near Corpus Christi, Texas, for USD 1 Billion. voestalpine will retain the remaining 20% ownership. The facility, operational since 2016, has an annual production capacity of 2 million tons of HBI. The deal strengthens ArcelorMittal's position in the DRI market and supports its decarbonisation goals.
• June 2022 – Salzgitter AG and LKAB Group entered a partnership agreement for decarbonisation of the steel industry. The agreement focuses on decarbonizing steel production, and LKAB's transition to producing carbon-free sponge iron (HBI/DRI) is a key part of that strategy. The agreement was also helpful for Salzgitter's to achieve CO2-free steel production.

REPORT COVERAGE

The global market report provides a detailed analysis of the market. It focuses on key aspects such as profiles of leading companies, product types, and leading applications of the product. Besides this, it offers insights into the analysis of key market trends and highlights key industry developments. In addition to the aforementioned factors, it encompasses several factors that have contributed to the growth of the market over recent years.

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