One of the best steels I've ever used for making punches is a
material called "flutagon" or Atlantic A-33. This is an air hardening
steel, which means that tempering/hardening it is practically fool
proof, just get it hot enough and let it cool at room temperature,
voila, it's at proper hardness. Plus, you can work on hot materials
without losing the temper. I doubt many of you have done hot forging
and cutting with non-ferrous metals, but it's big fun taking a 2 inch
diameter bar of silver, putting it in a forge, then working it red
hot under a 900 pound Reiter air hammer. Moves like butter.
Anyway, I don't know all the sizes flutagon comes in, but I seem to
remember it came in rods as small as 1/4 inch diameter. One nice
feature of the material is its cross section. A sort of squarish rod
with flutes, like a Doric column. It's perfect for chasing tools,
since it's got a built in grip. Here's a link to a source.
David L. Huffman