The traditional iron and steel industry are characterized by its huge scale, heavy consumption of energy and resources, and complicated technical processes. Due to the limited energy and resource deposit, the concept of circulation economy needs to be introduced in the next generation iron and steel industry. New processes must be developed through technical innovation, and converted progressively to three main functions: metallic material preparation, energy conversion, and social wastes treatment. With this strategy, fundamental studies have been carried out at the Key Laboratory of Modern Metallurgy & Materials Processing, Shanghai University. The researches involve hydrogen reduction of fine iron ore at low temperature, mixture endreduction in iron bath with carbon and hydrogen, trace elements separation from scrap, metallurgical theory, and modeling with multi-scales of time and scope, etc.