More advanced direct reduction processes were developed at the beginning of the 20th century, when it became possible to smelt pre-reduced ores using the Martin-Siemens process or the electric arc furnace. Based on this technical and economic model, a number of processes were industrialized before World War II (the Krupp-Renn process adopted by the Shōwa Steel Works, the Chenot process, etc.). They remained confidential, however, and their profitability was generally debated.
Modern direct reduction processes, based on the use of natural gas instead of coal, were studied intensively in the 1950s. On December 5, 1957, the Mexican company Hylsa started up the first industrial production unit of this type in Monterrey, with the pre-reduced ore obtained destined for smelting in an electric arc furnace. As the production of pre-reduced ore with natural gas was economically viable, several plants were built in the late 1960s. As a cheap supply of natural gas was essential to their profitability, most plants were located in countries with gas deposits, in Latin America (where many were developed) and in the Middle East.
In 1970, worldwide production of pre-reduced iron ore reached 790,000 tonnes. The processes then in operation were the HYL process (680,000 tonnes produced), an SL/RN unit, a Purofer unit, and the first plant to use the Midrex process.
Although profitable and innovative, the processes invented did not ultimately prove to be a technological revolution capable of supplanting the traditional blast furnace-based process. However, the quantity of steel produced from pre-reduced materials grew steadily, outstripping world steel production:
* in 1976, installations in service totalled less than 5 Mt;
* in 1985, annual production was 11 Mt for an installed capacity of around 20 Mt, the difference being explained by fluctuations in energy costs;
* in 1991, production reached 20 Mt.
* in 1995, worldwide production of prereducts passed the 30 Mt mark for the first time.
* In 2010, 70 Mt were produced, 14% from HYL processes and 60% from the Midrex process. The latter accounts for most of the growth in natural gas-fired production of pre-reduced products, although since 2005 coal-fired processes have been making a strong comeback, mainly in India.
Packaging of pre-reduced iron ore is evenly divided between sponge iron and briquettes. Sponges are a highly porous metallic product, close to the original ore but highly pyrophoric, which limits their transport. They are therefore often subjected to hot compaction, which improves both product density and handling safety. In 2012, 45% of prereducts were transformed into briquettes in this way.