Steel was known in antiquity, and may have been produced by managing bloomeries — iron-smelting facilities — so that the bloom contained carbon. Steel is mentioned in the Bible: Jeremiah 15:12 of the Authorized King James Version, it reads: "Shall iron break the northern iron and the steel?". However, it seems the Hebrews had no word for "steel" but used instead אסטמא (istoma).
The earliest known production of steel is a piece of ironware excavated from an archaeological site in Anatolia and is about 4,000 years old. Other ancient steel comes from East Africa, dating back to 1400 BC. In the 4th century BC steel weapons like the Falcata were produced in the Iberian Peninsula, while Noric steel was used by the Roman military. The Chinese of the Warring States (403–221 BC) had quench-hardened steel, while Chinese of the Han Dynasty (202 BC – 220 AD) created steel by melting together wrought iron with cast iron, gaining an ultimate product of a carbon-intermediate steel by the 1st century AD.
Evidence of the earliest production of high carbon steel in the Indian Subcontinent was found in Samanalawewa area in Sri Lanka. Wootz steel was produced in India by about 300 BC. Along with their original methods of forging steel, the Chinese had also adopted the production methods of creating Wootz steel, an idea imported into China from India by the 5th century AD. This early steel-making method in Sri Lanka employed the unique use of a wind furnace, blown by the monsoon winds and producing almost pure steel. Also known as Damascus steel, wootz is famous for its durability and ability to hold an edge.
It was originally created from a number of different materials including various trace elements. It was essentially a complicated alloy with iron as its main component. Recent studies have suggested that carbon nanotubes were included in its structure, which might explain some of its legendary qualities, though given the technology available at that time, they were produced by chance rather than by design. Natural wind was used where the soil containing iron was heated up with the use of wood. The ancient Sinhalese managed to extract a ton of steel for every 2 tons of soil, a remarkable feat at the time. One such furnace was found in Samanalawewa and archaeologists were able to produce steel as the ancients did long ago.
Crucible steel, formed by slowly heating and cooling pure iron and carbon (typically in the form of charcoal) in a crucible, was produced in Merv by the 9th to 10th century AD. In the 11th century, there is evidence of the production of steel in Song China using two techniques: a "berganesque" method that produced inferior, inhomogeneous steel and a precursor to the modern Bessemer process that utilized partial decarbonization via repeated forging under a cold blast.
Reference : Wikipedia