The railroads used steel for their rails. Railroads made it much easier to transport large quantities of the natural resources needed to produce steel (iron, coal), which increased the demand for those products.
The development of steel was critical to the development of railroads, as the rail lines were made up of steel. In American history, it is evident that the increased production of steel at lower costs resulted in the expansion of railroads in the US. For example, after Andrew Carnegie brought the Bessemer process to the US the railroad industry changed forever. The Bessemer process made steel much more efficiently and cheaper than ever before. After the success of this process, developing railroads were much cheaper.
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