The opportunities to improve the performance of an existing production concept by plant retrofit are largely dependent on the available knowledge of the best operational state of the plant and its parameters and conditions. In this paper, nonlinear programming was used to analyze the economic potential of the use of large volumes of gases in a steel plant to produce methanol as a valuable byproduct in steelmaking. Conventional blast furnace operation was compared with the option of operating the blast furnace with top gas recycling after carbon dioxide stripping. The optimal integration of the processes was investigated by minimizing the cost of liquid steel production, considering the cost of raw materials and fuels, CO2 emission, and stripping, as well as credits for power, district heat, and methanol production. It was found that the novel way of operating the blast furnace with cold oxygen blowing and top gas recycling was well suited for combination with a polygeneration system using the residual gases of the steel plant.