Plastic wastes can play the significant role of reductants for iron oxides by supplying reducing gases, e.g., H2 and CO, through pyrolysis. However, there is a problem that the thermal degradation temperature of plastics is significantly lower than the reduction temperature of iron oxide. If a large temperature difference can be formed within the composite granule, the reducing gases thus released can be used as reductants. Therefore, in this paper, the reduction behavior of the composites prepared by using hematite, graphite, and polyethylene regents with different compositions and structures was examined in order to understand the reduction behavior and to attain a high utilized ratio of polyethylene to reduction. Reduction experiments of the composites were carried out under an inert gas flow, and gases formed during reduction were continuously analyzed. The reduction degree of hematite was calculated using the concentration of these gases. Further, micro- and macrostructures of the reduced composite were observed. The addition of polyethylene to a hematite composite containing polyethylene and graphite led to a decrease in the final reduction degree, under the same ratio of carbon to oxygen in the composite. This indicates that the contribution of polyethylene to the reduction reaction was limited. This is because the crack formation enhanced the direct outward flow of the composite without contributing to the reduction reaction. In contrast, the double-layer composite, in which the polyethylene content in the inner layer is larger than that in the outer, shows an effective utilization of polyethylene as compared to the homogeneous composite.