China Baowu and Rio Tinto direct reduction trials have reached an important technical milestone in China. The companies successfully tested industrial-scale pellet production and hydrogen-based direct reduction using Rio Tinto’s Pilbara Blend iron ore. Therefore, the results expand the potential role of Australian mid-grade ore in lower-carbon steelmaking.

The work took place at Baoshan Iron & Steel’s Zhanjiang Steel operations. Pellets containing about one-third Pilbara Blend ore entered a hydrogen-based shaft furnace to produce direct reduced iron, or DRI. Afterwards, the DRI was converted into steel in an industrial-scale basic oxygen furnace. In addition, the companies tested the material in a small electric smelting furnace.

How the industrial direct reduction trials worked

First, a five-million-tonne-per-year grate-kiln facility produced the trial pellets. Next, a one-million-tonne-per-year hydrogen-based shaft furnace converted those pellets into DRI. Therefore, the project tested the material under industrial operating conditions rather than only in a laboratory.

The resulting DRI then followed two processing routes. Baowu used an industrial basic oxygen furnace for steel conversion. Meanwhile, a 500 kg electric smelting furnace tested how the material could perform in a future DRI-plus-electric-melting route.

Why Pilbara mid-grade iron ore matters

Direct reduction plants traditionally prefer high-grade iron ore because lower impurity levels simplify furnace operation and steel conversion. However, high-grade resources represent only part of global ore supply. Consequently, the industry needs practical solutions for low- and mid-grade material.

Pilbara Blend is a major seaborne iron ore product. Therefore, confirming its technical suitability as part of a DRI pellet blend could widen the raw material base for hydrogen-based steelmaking. It may also reduce dependence on a limited pool of premium-grade ores.

Nevertheless, the trial does not mean that all Pilbara ore can immediately replace high-grade DRI feed. Commercial deployment will still depend on beneficiation, pellet quality, furnace design, energy costs and impurity management.

Commercial significance for the steel value chain

For iron ore producers, the result protects the future relevance of mid-grade resources as steelmakers reduce emissions. Meanwhile, steel producers gain another possible feedstock option for hydrogen-based direct reduction and electric melting.

The project also shows why decarbonisation requires cooperation across mining, pelletisation, ironmaking and steel conversion. In other words, changing the reductant alone is not enough. Ore preparation, furnace performance, power supply and downstream quality must work together.

Actual emissions savings will still depend on how the hydrogen and electricity are produced. However, a hydrogen-based DRI route can significantly reduce dependence on metallurgical coal when compared with the traditional blast furnace process.

What the development means for steel buyers

In the short term, buyers should not expect an immediate change in steel grades, specifications or spot prices. Instead, the milestone is an upstream technology development. Therefore, procurement teams should continue to focus on mechanical properties, chemistry, tolerances and product standards.

Over time, however, buyers may receive more requests to define carbon reporting requirements. For example, project owners may ask for product-level emissions data, renewable energy evidence or traceable ironmaking routes. In addition, suppliers may begin separating conventional and lower-emissions steel offers.

Buyers should also avoid treating “green steel” as a single technical grade. The production route and emissions profile may change, while the finished steel must still meet the required ASTM, EN, JIS or GB standard.

Procurement and quality checks

First, buyers should continue requesting Mill Test Certificates with heat numbers, chemistry and mechanical properties. In addition, low-carbon procurement programs should define the required emissions boundary, calculation method and supporting documents.

Supplier audits should also review raw material traceability and production routes. Therefore, buyers should ask whether carbon claims cover only steelmaking or the wider value chain. Otherwise, different suppliers may present figures that are not directly comparable.

Finally, customers should confirm grade, thickness, width, finish, tolerance, quantity and destination before requesting an offer. Clear specifications reduce re-quoting and help suppliers assess both technical and sustainability requirements.

Outlook for hydrogen-based steelmaking

Overall, the trials improve confidence in a broader DRI raw material base. However, commercial growth will depend on affordable low-carbon hydrogen, reliable renewable power and suitable electric melting capacity.

Meanwhile, high-grade ore will remain important because it offers simpler processing. By contrast, successful use of mid-grade ore could improve supply flexibility and reduce raw material bottlenecks. Therefore, more blending, beneficiation and furnace trials are likely.

The next phase will focus on scale, consistency and cost. If those factors improve, Pilbara ore could retain a central position in the steel industry as production moves toward lower-emissions routes.

Relevant products and articles

Official reference links

Rio Tinto — Pilbara Blend Direct Reduction Trials  |  Rio Tinto — 2023 Climate Partnership  |  Rio Tinto — Low-Carbon Steel Collaboration  |  World Steel Association

© tiscoco.com | Steel technology insights and procurement guidance. Information reflects publicly available company announcements as of 15 June 2026. The industrial trials demonstrate technical progress, but they do not represent full commercial deployment or guaranteed product-level emissions reductions.