During the production of steel wool, a slicing tool shaves fine threads of metal, which produces a tremendous amount of heat. To reduce the chance of fire and lessen friction, the slicing tool is kept cool with oil, but this means the steel wool itself contains some oil, which makes it highly flammable and likely to spontaneously combust later on.
Keep steel wool away from open flames and any kind of electrical or mechanical spark -- unless you want to start a fire. You might consider bringing steel wool on a camping trip because you can use it to start a fire even if it's wet. Simply hold one part of the steel wool to the positive end of a battery and another part to the negative end. Rubbing the two terminals of a 9-volt battery against the steel wool works well too. Just don't keep the battery and the steel wool together in your pocket or pack or they could start a fire on their own!
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