Iron Rods are crafting materials that can be made in a Processor.
Like with everything else crafted in the Processor no recipes have to be unlocked for this.
8 Iron Rods can be processed from 1 Iron Bar that is made from Iron Ore in a Forge.
Or 4 Iron Rods can also be processed from 1 Iron Slab each.
Iron Rods are used for different crafting recipes, like for Diamond Swords, Golden Swords, Healing Beacons, Advanced Excavators, Iron furniture and a number of building blocks too (as of R26 in December 2015).
Iron Rods are no blocks, so they cannot be put into the quick-bar, cannot be placed into the world and cannot be displayed on Wall Shelves, in Wood Planters nor in Flower Pots.