Europe Hot Briquetted Iron Market Size, Share, Growth and Industry Analysis By Type & Application, Regional Insights and Forecast to 2024-2032

Growth Factors of Europe Hot Briquetted Iron (HBI) Market

The Europe Hot Briquetted Iron (HBI) market was valued at USD 1.68 billion in 2024, is projected to grow to USD 1.79 billion in 2025, and is expected to reach USD 2.84 billion by 2032, exhibiting a CAGR of 6.8% during the forecast period (2025-2032).

HBI, a compacted form of Direct Reduced Iron (DRI), plays a critical role in Europe's transition toward low-carbon steelmaking. Produced by reducing iron ore pellets with natural gas-based reducing gases such as hydrogen and carbon monoxide, HBI offers high metallization and safety advantages in handling and transportation. Its use as a clean, consistent, and low-impurity feedstock in Electric Arc Furnaces (EAFs) and blast furnaces positions it as a cornerstone of Europe's drive toward sustainable steel production.

Major players such as Metalloinvest MC LLC, ArcelorMittal, NLMK Group, and Voestalpine Group are leading market transformation through technology innovation, capacity expansion, and decarbonisation initiatives.

Market Trends

Policy Pressure and Sustainability Initiatives Fuel HBI Demand

Europe's commitment to climate neutrality and industrial decarbonisation is propelling the adoption of hot briquetted iron. Policy mechanisms such as the Carbon Border Adjustment Mechanism (CBAM) and tighter EU steel import safeguards are pushing steelmakers to integrate cleaner feedstocks.

As European industries intensify their push for "green steel", HBI is emerging as a vital solution, bridging the gap between raw material quality and environmental responsibility. Steelmakers are investing heavily in hydrogen-based DRI technologies and EAF capacity expansions, where HBI serves as a stable, low-emission input.

This trend is reinforced by major infrastructure investments across Europe and corporate commitments to carbon-free steel supply chains, particularly in Germany, France, and Austria.

Market Dynamics

Drivers - Rising Demand from Steel-Intensive Sectors

The growing use of steel in construction, automotive, renewable energy, and machinery is a key market driver. Europe's green infrastructure initiatives, including wind farms, rail networks, and smart grids, demand high-quality, durable steel products.

HBI enhances steel quality and productivity, reducing impurities and promoting consistent metallurgical properties. In the automotive sector, the shift toward lightweight, electric, and low-emission vehicles further amplifies the need for high-grade steel - a demand that HBI helps meet efficiently and sustainably.

Restraints - High Capital and Operating Costs

Despite favorable policies, high operational costs and upfront investments remain major challenges for HBI production in Europe. Establishing direct reduction plants and renewable-powered facilities involves substantial capital expenditure.

Moreover, Europe's relatively high energy prices and carbon compliance costs limit competitiveness compared to producers in energy-abundant regions like the Middle East and North Africa. Financial constraints could slow large-scale adoption unless mitigated through green financing and strategic public-private partnerships.

Opportunities - Decarbonised Steel Production

The shift toward environmentally sustainable steelmaking presents vast opportunities for HBI producers. With increasing pressure to reduce emissions, European policymakers are incentivizing low-carbon feedstocks and renewable hydrogen integration.

As steelmakers pivot from blast furnace-basic oxygen furnace (BF-BOF) routes to EAF-based production, HBI becomes an essential alternative to volatile scrap supplies. The growing end-user preference for certified "green steel" in construction and automotive manufacturing is creating strong market tailwinds for HBI across Europe.

Challenges - Elevated Natural Gas and Hydrogen Costs

Energy costs are a critical bottleneck in Europe's HBI market. The region's dependence on imported natural gas and the high cost of electrolytic hydrogen make production expensive compared to suppliers in regions such as the Middle East or Latin America. These structural cost disparities may delay widespread deployment of competitive, low-carbon HBI unless hydrogen prices fall or local renewable capacity expands.

Segmentation Insights

By Type

• Fe Content 90-92%: This segment dominates the European HBI market, offering a cost-effective balance between purity and performance. With sufficient metallization for EAF and blast furnace operations, it provides consistent quality and affordability, particularly in markets with limited scrap availability.
• Fe Content >92%: High-grade HBI is gaining traction for specialty steel applications requiring superior purity, higher productivity, and lower energy consumption.

By Application

• Electric Arc Furnaces (EAFs) hold the largest market share, reflecting Europe's ongoing transition to low-carbon steelmaking. HBI is increasingly replacing scrap to ensure feedstock consistency and reduce emissions.
• Blast Furnaces (BFs) also use HBI to improve permeability, reduce coke use, and enhance overall furnace efficiency - supporting gradual decarbonisation.

By End-Use Industry

• Construction & Infrastructure leads HBI consumption in Europe. Major green projects - including bridges, energy grids, and renewable installations - require high-strength, low-emission steel, directly driving HBI demand.
• Automotive follows closely, as manufacturers seek sustainable, low-impurity steel for lightweight and electric vehicle production.

Regional Insights

Germany Leads Europe's HBI Adoption

Germany is the largest market for HBI in Europe, driven by its robust automotive and engineering industries and its leadership in EAF-based green steel technologies. The country's steelmakers - including Salzgitter AG and ArcelorMittal Germany - are actively expanding HBI integration to meet both regulatory and customer sustainability demands.

Other key markets such as France, Austria, and Italy are ramping up investment in hydrogen-based DRI-HBI facilities as part of their national climate strategies.

Competitive Landscape

The European HBI market is increasingly competitive as producers race to align with decarbonisation goals and reduce dependency on external imports.

Key players include:

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

Recent Industry Developments:

• November 2024: Rio Tinto partnered with GravitHy in France to supply high-grade iron ore for ultra-low carbon HBI production.
• July 2022: ArcelorMittal acquired an 80% stake in voestalpine's Corpus Christi HBI plant for USD 1 billion, expanding global production capacity.
• January 2023: Metalloinvest boosted its Lebedinsky GOK HBI-3 output by 3%, reaching over 2 million tons per year through modernization.
• June 2022: Salzgitter AG and LKAB Group partnered to develop carbon-free sponge iron (HBI/DRI) as part of Europe's green steel transition.

Conclusion

The Europe Hot Briquetted Iron market is on a strong growth trajectory, supported by climate-focused industrial policy, technological innovation, and surging demand for sustainable steel. Despite cost and energy challenges, HBI's role in decarbonising Europe's steel sector is irreplaceable, positioning it as a strategic raw material for the continent's green transition.

Market Size Overview:

• 2024: USD 1.68 Billion
• 2025: USD 1.79 Billion
• 2032: USD 2.84 Billion
• CAGR (2025-2032): 6.8%

Unit Volume (Kiloton); Value (USD Billion)

Segmentation By Type

• Fe Content 90-92%
• Fe Content >92%

By Application

• Electric Arc Furnaces
• Blast Furnaces
• Basic Oxygen Furnaces
• Others

By End-use Industry

• Automotive
• Construction & Infrastructure
• Aerospace
• Nuclear
• Pharmaceutical
• Others

By Country

• Germany
• France
• U.K.
• Italy
• Spain
• Bulgaria
• Poland
• Slovakia
• Belgium
• Russia
• Rest of Europe