Without spoiling the story, one potential member of your party needs "Infernal Iron" to repair/improve themselves. I've found some, but as I can be a bit of a completionist, I'd like to find all of them. Or at the very least, ensure I haven't missed any in Act 1 or Act 2 before going to Act 3.
There are 10 pieces of Infernal Iron with fixed locations, and more can be obtained from destroying Steel Watchers. The ✗ links to the location on the online Interactive Map.
- Stonemason Kith will give you Infernal Iron if you successfully analyse the rocks. (✗) (And, unless this has been patched, you can use this single item for three upgrades, see here.)
- In a treasure crate behind Dror Ragzlin's throne in the Shattered Sanctum (✗)
- In the Zhentarim Hideout (✗) (you need to gain access to the room using the Burrow Hole nearby.)
- In the Blighted Village/Whispering Depths, in the locked Blacksmith's room (✗)
- In the Gauntlet of Shar, in the Grand Mausoleum, in a chest (✗)
- In that same area, Yurgir the Orthon possesses one. You have to kill him to obtain it.
- Outside in the Shadow-Cursed Lands, in the Masons' Guild in Reithwin (✗)
- Among Big Huido's smuggled goods in Baldur's Gate Lower City (✗)
- In Flymm's Cargo Basement in Baldur's Gate (✗)
- When you take the submersible there to Iron Throne, you can find another piece right after you exit (not entirely sure; this might have been patched)
- The Steel Watchers in the Lower City sometimes drop Infernal Iron.