* Ok yes the Chinese had them from about 500 BCE and could make cast iron tools, they couldn't make wrought iron in the blast furnace until about 200 CE.
It does seem as though dwarves follow Chinese steelmaking more closely than European. It's a combination of iron and pig iron, which is pretty similar to how some Chinese smiths made steel between about 100 BC and 100 AD (using a combination of wrought and cast iron, melted in a crucible). And yes, as you mentioned, they had a workable blast furnace by about 200 AD.
The Indians had
very advanced, glass-fluxed crucible steel at
least by 200 AD, possibly as early as 300 BC.
And the dwarven use of flux
definitely implies that the dwarves are making some type of crucible steel.
Also, the forge/cast semantics are pretty meaningless since it also applies to copper-based stuff. Bronze weapons were nearly always cast, then cold-worked, but it doesn't say "cast and cold-work bronze short sword" either.
And on the semantics angle, recycled items, regardless of material, are marked for "melting," not for "forge-welding into a billet."
Magma isn't hot enough to melt iron, but Toady has said that will be addressed in the next version.
So if a complete melt and historical human ignorance of nickel are the main reasons to not have iron-nickel alloys, then the dwarves at least could logically have them.