Two BlueScope employees have tested positive to COVID in the past week.
The employees both worked at the Springhill plant and a BlueScope spokesman said they were isolating at home.
"Based on what we know from our contact tracing, we believe they are isolated instances, and the cases are not linked," the spokesman said.
He added that they were the only cases at the steelworks so far in this pandemic.
"Up until now, we've been fortunate to have largely kept COVID at bay across the steelworks," the spokesman said.
"Given the high level of cases across NSW, the rise in numbers across the local Illawarra community and the infectious nature of the Delta variant, it is not surprising that cases are getting closer to home."
NSW Health had identified close contacts of the two workers and they have been required to get tested for COVID.
"Those identified as close contacts are isolating at home under NSW Health directions," he said.
"This includes around 20 co-workers on two of the shifts at Springhill who have all since returned negative test results."
The spokesman said the positive cases and level of close contacts has had "no impact" on production at Springhill.
He said the company had brought forward maintenance on the equipment line affected by the cases and operations will restart when that is complete.