I would suggest "If you can't stand the heat, get out of the kitchen".
Some aspects of steel production use a lot of heat. In a fantasy story, steel would be produced by ancient, medieval, or early modern methods, instead of by modern industrial methods, and so would involve more manual labor close to the steel than modern steel production does.
Possibly these non human people are very sensitive to heat and can not force themselves to get close enough to the heat source to be able to do anything, included necessary steps in steel production.
Possibly those non human people have a lot of hair, fur, or feathers that can catch fire from stay sparks and so they reduce their use of fire to a bare minimum.
I note that humans (Homo sapiens) are believed to have evolved as endurance hunters, who chased prey for hours at a time in the African heat until they caught their prey. Thus humans have far more sweat glands than most animals and can cool off better than most animals.
If those non human people don't have sweat glands or as many as humans, possibly they might overheat and die when trying to make steel.
If your character trades blank ingots of steel to those people that would not work. They would have to work the steel to make into objects they could use, and so they would have to work the steel when it was very hot. Unless they use magic to turn a steel ingot into a steel object with the same mass, but cannot use magic to turn iron, carbon, etc. into steel.
Possibly these people are allergic to elemental iron and/or carbon, and/or to all forms of steel except for surgical steel.
Surgical stainless steel is a grade of stainless steel used in biomedical applications. The most common "surgical steels" are austenitic SAE 316 stainless and martensitic SAE 440, SAE 420, and 17-4 stainless steels. There is no formal definition on what constitutes a "surgical stainless steel", so product manufacturers and distributors often apply the term to refer to any grade of corrosion resistant steel.
They then would be unable to make steel themselves, though they could use hypoallergenic surgical steel.
Possibly these nonhuman people lack the necessary physical strength for some part of the steel making process, which in a fantasy setting would probably involve a lot of physical labor instead of automated mechanical processes. Possibly they can't beat the steel ingots with enough force to shape them into any products.