A direct process for manufacturing steel, by means of which iron with a carbon content from 0.2% upwards can be produced by smelting, in a specially constructed electrical furnace, a mixture of hematite and coal, or charcoal, the process being continuous. The reduced metal accumulates at the bottom of the furnace, from which it is tapped. Both sulfur and phosphorus are reduced to a low figure without additional refining, while the manganese and silicon contents are controlled in the same way as in the ordinary openhearth process.