The iron and steel industry is a major emitter of carbon dioxide globally. To reduce their carbon footprint, the iron and steel industry pursue different decarbonization strategies, including deploying bio-based materials and energy carriers for reduction, carburisation and/or energy purposes along their value-chains. In this study two potential roles for biomass were analysed: (a) substituting for fossil fuels in iron-ore pellets induration and (b) carburisation of DRI (direct reduced iron) produced via fully hydrogen-based reduction. The purpose of the study was to analyse the regional demand-driven price and allocative effects of biomass assortments under different biomass demand scenarios for the Swedish iron and steel industry. Economic modelling was used in combination with spatial biomass supply assessments to predict the changes on relevant biomass markets. The results showed that the estimated demand increases for forest biomass will have significant regional price effects. Depending on scenario, the biomass demand will increase up to 25 percent, causing regional prices to more than doubling. In general, the magnitude of the price effects was driven by the volumes and types of biomasses needed in the different scenarios, with larger price effects for harvesting residues and industrial by-products compared to those of roundwood. A small price effect of roundwood means that the incentives for forest-owners to increase their harvests, and thus also the availability of harvest residues, are small. Flexibility in the feedstock sourcing (both regarding quality and geographic origin) will thus be important if forest biomass is to satisfy demands in iron and steel industry.