Demand for iron began to fall from the 1870s as steel production began to compete with traditional iron products, and it was decided to convert the plant to steel production. In 1890, the Dudley Estate sold the iron works to a new public company, which would aim to convert to steel production. The price of the works was set at £110,000 pounds of which £10,000 was paid in cash and the remainder by a mortgage provided by the Dudley estate itself. The company passed to the Lancashire Trust and Mortgage Insurance Corporation Limited, which floated the shares in the firm to the public, receiving £135,000. The new company was called the Earl of Dudley's Round Oak Iron and Steel Works and was incorporated on 16 April 1891. The chairman of the new company was Mr Richard Dalgleish and the managing director was Mr R. Smith Casson. Steel was first produced in August 1894. However, the company had run into financial difficulty and on 26 November 1894, the company went into liquidation, resulting in repossession by the Dudley Estate. A new company, The Earl of Dudley's Round Oak Works Ltd, was established on 15 July 1897 under the ownership of the Dudley family. The chairman of the new company was The 2nd Earl of Dudley, and the managing director was George Hatton.