Steel case ammo

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The steel case has nothing to do with it. Steel core bullets are the concern, and it can have steel in the bullet regardless of the case material.

I'm no expert on this, but I think the fire hazard comes from the steel core bullet's tendency to spark on impact.
 
I think there is some confusion in terminology. Steel case ammo does not cause fires. Steel core ammo (the bullet has steel inside it) not only can make dents and divots in the backstop, it can make sparks. If you see lots of sparks coming off the backstop, stop and check your ammo to be sure you are not shooting steel core ammo.

When a cartridge fires, the powder burns and spits the bullet out the barrel. Well, most of the powder burns. An unburned grain or two of gunpowder often goes downrange and lands on the floor. After tens of thousands of rounds have been fired, there may be enough grains of unburned powder on the floor to catch fire if lit off by a spark.

For that reason, range officers have little magnets to test if a bullet has steel inside it. (Lead and copper are not magnetic.)
 
I've personally seen a fire started that way in an indoor range, by the guy 2 lanes down from me.
 
Some USGI M80 ammunition (7.62x51, .308), the jackets are steel. The cases are brass. Generally it is linked for machine guns. It is a copper-washed, bimetal projectile.
 
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