DR pellet is essential for producing direct reduced iron (DRI) which is a highly pure form of iron, and is often used as a feedstock along with steel scrap to produce steel in the electric arc furnace (EAF). DR pellet has a typical Fe content above 66%, higher than is typical of blast furnace (BF) pellets.
Annual DR pellet production has reached 100Mt for
the third consecutive year. In 2020, the production was 122Mt, despite the
impact of the Covid-19 pandemic. AME forecasts that DR pellet production will
reach 143Mt in 2025 at a CAGR of 3.2%.
DR pellets are primarily produced in four regions
of the world: North and South America, Europe and the Middle East. However, the
presence of DRI plants limits the availability of pellets for merchant trade
outside the countries or regions where they are produced. AME estimates that
only ~36Mt of DR pellet was produced for the seaborne market in 2020, and this
will increase to 52Mt in 2025.