The present paper reports fabrication of superior steel compact using nanostructured steel powder generated from industrial steel scrap. Extra low carbon and low carbon steel powders with size of submicron were generated from industrial waste by planetary milling for 5 h. The milled powders are characterized by X-ray diffraction (XRD), scanning electron microscopy (SEM) and transmission electron microscopy (TEM) and hardness. Finest particles are obtained after 3 h of milling in both cases. In case of extra-low carbon steel, cold welding and agglomeration is observed after 5 h of milling. However, in case of low carbon steel, no such phenomenon is visible after 5 h of milling. The effect of ball to powder weight ratio (BPR) is studied using BPR of 12:1 and 6:1 for low carbon steel chips by milling for 3 h. A higher yield of 94.29% is obtained when milling conducted at BPR 12:1 than 86.94% yield at BPR 6:1 after milling low carbon steel for 3 h. Lower average particle size of 5-10 mu m is obtained when milling is carried out at BPR 12:1 than 15-20 mu m at BPR 6:1. In case of low carbon steel, % yield increases from 94.29% to 99.14% as milling time increases from 3 to 5 h. Yttria free and 1 wt% yttria dispersed both extra-low carbon and low carbon steel powders are cold compacted and conventionally sintered at 1100 degrees C for 1 h. Significant improvement in the hardness was achieved through addition of small amount of yttria with both the steel powder generated from the steel scrap. (C) 2017 Elsevier B.V. All rights reserved.