The amount of steel chips generated by lathes and CNC machines is 1200 million tons per year, and they are difficult to recycle. The effect of adding steel chips without pre-cleaning (covered with production lubricants and cooling oils) on the properties of concrete was investigated. Steel waste was added as a replacement for fine aggregate in the amounts of 5%, 10% and 15% of the cement weight, which correspond with 1.1%, 2.2% and 3.3% mass of all ingredients and 0.33%, 0.66% and 0.99% volume of concrete mix, respectively. The slump cone, air content, pH value, density, compressive strength, tensile strength, tensile splitting strength, elastic modulus, Poisson’s ratio and thermal parameters were tested. It was observed that with the addition of lathe waste, the density decreased, but mechanical properties increased. With the addition of 5%, 10% and 15% metal chips, compressive strength increased by 13.9%, 20.8% and 36.3% respectively compared to plain concrete; flexural strength by 7.1%, 12.7% and 18.2%; and tensile splitting strength by 4.2%, 33.2% and 38.4%. Moreover, it was determined that with addition of steel chips, thermal diffusivity was reduced and specific heat capacity increased. With the addition of 15% metal chips, thermal diffusivity was 25.2% lower than in the reference sample, while specific heat was 23.0% higher. No effect was observed on thermal conductivity.