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If you have poor city coverage, the effect will ripple upstream to cause low demand of your raw materials.
Yes, because it will be capped at industry level 1 until you ship machines steadily for more than 6 months that require steel!
But what are the machines total "potential" demand to yellow industry zones? It's possible that it isn't enough.
https://steamcommunity.com/sharedfiles/filedetails/?id=1192167529
To do that you need to find customers for the Steel Mill. That means shipping Steel to Machine Factories and/or Goods Factories (in addition to the other products those factories require).
If production is still not enough, you need to find the Goods and Machines Factories more customers to sell to. That either means,
1) Increasing the coverage of existing towns to cover more buildings (because you might not be delivering to all buildings in a town,
2) Connecting passenger services to a town so that it fuels growth. Growth means demand for goods increases because there are more customers, or,
3) Connect up delivery to a new town. A new town means new customers to deliver to.
By connecting up new customers that the Machine Factory can sell to, you increase the potential for the Machine Factories products. Increasing the Potential means that it will start demanding more input products (ie Steel). Increasing the demand for Steel means the Steel Mill will start demanding more Coal and Iron, which is what you're looking to do if you're not delivering enough.
You start with customers, and work your way back through the chain until you get to the raw resource producer. By adding customers, it has a ripple effect through the entire production chain. Every industry can ramp up to 1600 units of yearly production, that means to get full production, and maximum goods produced, you want to be connecting to enough towns to supply 1600 units worth of goods (the Machine Factory being an exception because it's two separate products at 800 each, rather than 1 at 1600).
When you increase the number of end consumers, all you need to do is start ramping up the capacity of your lines when the product eventually flows. When you do that, product will flow, and the question won't be, why are the Mines not producing enough, but rather, how do I efficiently transport the products the factories are throwing at me.