The explosion occurred at the oxygen control unit near the Steel Melting Shop at the plant of Rashtriya Ispat Nigam Limited (RINL), sources at the plant said.
A technical problem at the unit was suspected to be the cause for the mishap. Sources said the explosion could have been caused due to abnormal build up of pressure in the unit.
Around 15 persons were injured in the accident and almost all of them were in a critical condition, sources said.
Security sources at the plant said eight people lost their lives in the mishap.
Vizag Police Commissioner Purnachandra Rao said six bodies were recovered from the site of the explosion.
The injured have been admitted to the Steel Plant's General Hospital.