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I am still figuring out how to make axe head. Pretty much the only reason I bothered with smithing at all. Edit: You can make the wood axe head, but not old axe head.
OK, so I found a way to convert steel rods to iron chunks in the furnace, but nothing for steel ingots, blocks or chunks (You can divide steel ingots into blocks and chunks). Weird you can't forge steel chunks into steel quarters, halves and bars, like you can with iron. That would provide a closed loop.