Compass is installed on an iron ship

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When a compass is installed on an iron ship, small correcting magnets are necessary to counteract the magnetic interference caused by the iron. The iron itself is not magnetized but is a magnetic material that can distort the compass needle's readings. This distortion occurs because the iron can influence the magnetic field around the compass. Additionally, the difference between true north and magnetic north can further complicate navigation. Correcting magnets help ensure accurate compass readings despite these challenges.
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when a compass is installed on an iron ship, why must there be small correcting magnets installed near the compass? Is it because the iron is itself magnetized somehow?
 
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Not necessarily. But iron is a magnetic material and will affect the compass needle. Just as you can use magnets to pick up nails. The nails aren't necessarily magnetized, yet they are still attracted to a magnet.
 
It could be due to the fact that true north is different from the magnetic north.
 
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