The Labor MP used a private members' statement in state Parliament late Thursday to reiterate concerns raised at Wednesday night's "Save Our Steel" community meeting at the Fraternity Club in Fairy Meadow.

Ms Watson also called on Premier Mike Baird to make a ministerial statement in Parliament about his discussions with BlueScope representatives which he confirmed to the Mercury on Thursday - and on the future of the steel industry in NSW.

In her statement, the MP said the Illawarra had been "gripped by uncertainty after BlueScope Steel let slip to its workers that unless costs were cut the plant at Port Kembla could be closed down".

"BlueScope Steel management have since pulled down a cone of silence and refused to come clean on the future of steel-making in the Illawarra. This is simply not good enough," Ms Watson said.

"The region in which this company has operated for the last 80 years deserves far better treatment than it has received throughout the last few weeks of this crisis.

"There are some in the Illawarra community who may not think the possibility of the steel works closing is serious ... that they have heard these threats before and BlueScope Steel will not pull the pin this time. I suggest those who hold this view are sleep-walking into a catastrophe."

Ms Watson told the Mercury: "BlueScope Steel must stop treating the Illawarra community like mushrooms".

"The Illawarra cannot afford to sleep-walk through this crisis.

"We cannot allow any government to maintain a relaxed business-as-usual attitude, if we do we will be dealing with a social and economic catastrophe [that] will take the Illawarra decades to recover from," she said.

"We all have an obligation to do whatever is in our power to shake-up this complacency and save our steel industry."

Ms Watson also reiterated the unanimously passed resolution from Wednesday night's meeting and called on the government to "mandate the use of 50 per cent Australian-made and produced steel in infrastructure projects across the country".