2013-11-14 02.34.44

Crafting using the Electric Compressor.

2013-11-14 02.34.36

Crafting in the Ingot Compressor.

Compressed Steel is gained when you compress 1 compressed iron plus 2 coal or, if you have a mod that adds steel ingots          (like mekanism and artifice)you can compress 2 of those to get Compressed Steel.