Ferrite is a body-centered cubic (BCC) form of iron, in which a very small amount (a maximum of 0.02% at 1333°F / 723°C) of carbon is disolved. This is far less carbon than can be dissolved in either austenite or martensite, because the BCC structure has much less interstitial space than the FCC structure. Ferrite is the component which gives steel and cast iron their magnetic properties, and is the classic example of a ferromagnetic material. This is also the reason that tool steel becomes non-magnetic above the hardening temperature - all of the ferrite has been converted to austenite. Most "mild" steels (plain carbon steels with up to about 0.2 wt% C) consist mostly of ferrite, with increasing amounts of cementite as the carbon content is increased, which together with ferrite, form the mechanical mixture pearlite. Any iron-carbon alloy will contain some amount of ferrite if it is allowed to reach equilibrium at room temperature.

Body Centered Cubic Unit Cell Photomicrograph of Ferrite Structure
Body Centered Cubic Ferrite photomicrograph

at the Sign of the Three Planes