Steel Ingots are produced by the Blast Furnace from one Iron Ingot and either one Coal Coke or four Charcoal. Alternatively, one can use Industrial Blast Furnace (one refined iron and two coal dust) when GregTech is installed. They are used in a number of RailCraft recipes, most notably the H.S. Rail and the Bore Head, and, indirectly, the Tunnel Bore via the production of Steel Blocks. Some GregTech recipes also use steel ingots.
Alternate Crafting Method (Traincraft)
It is possible to craft steel using Traincraft. To start off, you will need theTrain Workbench and some coal. You will be using the Train Workbench for the rest of these steps and not the crafting table. Place the coal in a two by two square, and it will give you 4 of a special kind of coal dust. Next, take either a clay ball or obsidian block and surround it in 8 of the special coal dust to create Graphite. Now you must place the Graphite in the center of the Train Workbench, and place three Iron Ingots across the top to produce Steel Dust! Now simply smelt the Steel Dust in any kind of furnace and you have relatively cheap and easy Steel.
Confirmed to still be working as of 4/23/2013 with the Mindcrack FTB pack, however there appears to be a minor glitch where the crafting method in the train workbean only be done with singly stacked items; that means that only 4 coal can be turned into dust at a time, etc.
Please Note that Traincraft Steel can be converted to IC2/Redpower 2 Steel by making the Traincraft steel in to nuggets, and crafting them back in to ingots. This is a cheap way to Create steel for many IC2 and Gregtech tools and machinary without having an industrial blast furnace.
Block of Steel
Diamond Bore Head
Steel Bore Head
Iron Bore Head