Right click on the furnace. You put something to smelt in the top box e.g iron ore and you put something for it to burn on in the bottom box e.g coal.
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under the fire picture put wood or coal.
You can't.
There is no steel in minecraft. You're referring to iron, and you need to smelt iron ore in a furnace.
No, charcoal is made by burning wood in a furnace.
how to make a fire works in minecraft 1.5.2