Yes, steel is subject to rust. When iron (which is the primary ingredient of steel) is exposed to oxygen and water, it will go through an oxidation chemical reaction, which will form iron oxide. We commonly identify iron oxide as rust. Rust can form on steel both in the air or underwater. The chemical reaction is different underwater and creates iron hydroxide, and takes a longer amount of time. Carbon steel is typically coated in a protective layering to protect itself from rusting. Galvanized steel has a zinc protective coating for that purpose.nFor a more detailed answer, visit our why does steel rust page.