Fire crews are monitoring BlueScope's Port Kembla steel works after a highly volatile fuel exploded, injuring a worker.

Emergency crews were called to the site at 10:38am.

A BlueScope spokesman said a contract worker was opening a gas cylinder containing acetylene in a large building near a hot mill plant.

Fire and Rescue NSW duty commander Chad Wallace said the risk of the fire spreading was "enormous" and initial fire intensity was serious.

"We initially had trucks coming from all over the Illawarra, specialist foam trucks and ladder platform trucks from Sydney in case it did escalate.

"But luckily the first arriving crews from Wollongong and Warrawong were able to really aggressively get in and get some hose on the fire at the same time as keeping themselves safe."

The BlueScope spokesman said the fire ignited as a cylinder was opened.

Fire crews said the fire then spread to another cylinder in a bank of six.

A NSW Ambulance spokesperson said a man in his 40s suffered burns to his hand and was treated by colleagues and taken to a medical treatment facility at the site.

He was then treated by paramedics and taken to Wollongong hospital.

Fire and Rescue NSW sent 10 trucks to the steel works on the outskirts of the Wollongong CBD.

Mr Wallace said drones were being used to monitor the fire.

"Now the fire is going to slowly burn out and we are using drones in the building, we have two drones at work to have a look at the fire and take temperature readings," he said.

BlueScope said the injured man was being treated for superficial burns to his hands and a small graze.

The steelmaker said 10 to 15 workers in the immediate vicinity were immediately removed from the location and a further 25 removed from a broader exclusion zone.

Safe Work NSW is investigating the incident.