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This study contributes to the empirical literature on augmented neo-classical production function. It is done by introducing steel production into macro-production function of the European Union. The data is collected from the World Development Indicators and the World Steel Association from the period of 1980–2014. We apply second generations of unit root tests to examine stationarity and panel cointegration with cross-sectional dependence to analyze long run relationship between national income and steel production. Robustness of tests is also reached by using 23 estimators and country specific slopes. Whereas, to detect the cause and effect, Granger and Dumitrescu-Hurlin causality tests are applied. Uni-directional causality from national income to steel production is found. Recommendations are made on the basis of empirical results.