A few versions ago I made a change to the steel recipe to require Oxygen as well as iron.
I then made the replacement even more harsh as a result of some issues with other mods, causing the game to fail to load.
If you don't like the recipe containing oxygen (This is what forces it to chemical furnace), you can turn it off in the game options. From the main menu, go to settings, mod settings, startup tab, browse down to the Bob's Metals, Chemicals and Intermediates section, and turn off the "New Steel" option, it's on by default.
I'm not sure the best way to do that on a server.
EDIT: Actually, there is a bug in the latest version, I'll fix it at some point, you'll also need to turn off "Cheaper Steel" option to allow it to be craftable in the furnace as normal.