Sponge Iron is mainly used as a raw material for speciality steel as well as substitute for scrap. Made from iron ore, sponge iron in itself is not used. It is further processed to make wrought iron. The rise in price of scrap and other factors has led to the increase in the use of sponge iron for making good quality steel.

The quality of sponge iron is primarily ascertained by the percentage of metallization (removal of oxygen), which is the ratio of metallic iron to the total iron present in the product. Sponge iron manufacture is highly sensitive to raw material characteristics.

Therefore, it is essential to examine the chemical and physical characteristics of raw materials, both individually and in combination.

The sponge iron is a key raw material for the manufacture of steel. The appropriate percentage of metallization (removal of oxygen) ensures the high quality of the sponge iron. The percentage of metallization is the ratio of metallic iron to the total iron present in the product

Use of sponge iron

Sponge iron is not useful in itself, but can be processed to create . The sponge is removed from the furnace, and repeatedly beaten with heavy hammers and folded over to remove the slag,  any carbon or carbide and  the iron together. This treatment usually creates wrought iron with about three percent slag and a fraction of a percent of other impurities. Further treatment may add controlled amounts of carbon, allowing various kinds of heat treatment (e.g. "steeling").

In recent years, refinements to the production of sponge iron have made it possible to reduce the iron without necessarily having to melt the ore. Because the iron can be made into pellets and even into powder, it is an economic and useful substitute for the scrap metal sometimes used by steel manufacturers. The amount of time and resources required to produce sponge iron is minimal, so it is possible to manufacture large amounts quickly, a fact that only adds to the advantages of this type of iron product