I have been perfecting my own method of steel making over the last few years. I use a solid state direct method of reducing iron oxide to metallic iron in a bloomery style furnace. Carbon dissolves into the iron to make steel in a relatively controlled process.

The furnace is made of bricks made of sand, cement and vermiculite. The top of the stack is made of refractory blanket coated with furnace cement.

The air is provided by a shop-vac and the tuyeres are made of simple iron pipe plumbing fittings.

I have tried different types of ore based on availability: from hematite (Fe₂O₃) to magnetite (Fe₃O₄) and taconite. I found hematite to give the best results for me but any of these ores can be effectively reduced to metallic iron in the right conditions.

Charcoal is the fuel and the source of carbon. Mixed with oxygen at the right temperature will form carbon monoxide which is the reducing agent. Depending on the height of the stack, the duration of time during which the ore is exposed to the reducing atmosphere and the temperature there will be a reduction of the iron oxide to metallic iron and absorption of carbon. The two processes needed to make steel. The usual result of this type of furnace is a mixture of cast iron at the bottom, high carbon steel above and some wrought iron on top of a non-homogeneous globular mass called "the bloom."

The quality of the slag and the atmosphere in the hearth of the furnace will be greatly responsible for the final carbon content in the bloom.

This is a video of the process