It broke out at Tata Steel's site in Rotherham at about 1am after "several thousand" litres of oil caught fire, according to the South Yorkshire Fire and Rescue Service.
It was contained to one building by about 3am.
The plant's staff were evacuated quickly and there were no reports of any injuries, the BBC reported.
People living nearby were advised to keep their doors and windows closed as a precaution due to the amount of smoke spilling into the area.
"There was a fire at the Bright Bar Rotherham Facility," according to a Tata Steel spokesman.
"There were no injuries and the fire was contained before being extinguished.
"An investigation into the cause of the fire, which happened during a normal steel treatment process, has been launched."
A South Yorkshire fire service spokesman added: "The fire involves several thousand litres of oil, but crews quickly contained the blaze to one building.
"All on site personnel have been safely evacuated and there are no reports of any injuries."