Iron, steel and nickel are magnetic substances, that is, they can be attracted by another magnet. Once these materials are in a magnetic field, they act as magnets themselves because the electrons in their atoms become aligned along the magnetic lines of force. This means that you can pick up a whole string of paperclips attached to a single magnet. Once the first paperclip is separated from the magnet, the whole string will collapse because the paperclips are only temporarily magnetized.
Picture credit: google