We don't really know how the earliest metal smelting emerged. But you have to remember that most innovations do not emerge in a vacuum, but within established frameworks of long-standing traditional knowledge and practices. Agriculture, metalworking, etc., don't just appear. When we look in the areas where they happen, they can be seen to be part of historical processes, not sudden events.

Early metalworking did not start with steel, or iron, or even bronze or copper. It most likely started with lead or gold, soft metals that can be relatively easily heated.

Several other critical factors are important.

1. By the time metal smelting emerged, the use of controlled heating in pottery making, and in the improvement of the workability of some types of toolstone (coarser varieties of flints) was already a well-established technology in the same regions.

2. Powdered metal ores also can be used as pigments.

3. Softer metals (gold, lead, copper) can be cold-hammered into various forms, and most early metalworking societies practiced this type of metal working before any smelting ever emerged.

So what we have, long before anyone seems to have started smelting metal ores to obtain a purer product, is a number of established technological traditions. Now, consider that pigments made from powdered ores like malachite (copper ore) or galena (lead) might have been applied to pottery to add color / decoration prior to firing. Suppose that this powdered ore was too thick in some places, and in a kiln reached temperatures sufficient to melt. It might bead up, producing small copper or lead beads.

Alternatively, if native copper were being hammered into tools, the established practices of heating stone to improve workability might logically be applied in an attempt to improve the copper as well.

So there are at least two possible ways that early metalworking / smelting could have emerged out of existing practices and traditions.

Within this kind of historical development of technology, later developments, including the eventual development of iron smelting, can be contextualized.

Globally, and also individually in many regions, metalworking preceded smelting. Without smelting (the conversion of ore to metal), metalworking depended on native metals (metals found naturally in a metallic state rather than chemically bound in a ore). The most common pre-smelting metals were gold, copper, silver, platinum, and iron (either telluric iron, which is rare, or meteoric iron) This early metalworking led to knowledge of what metals looked like, and how they could be used. Working of native metals was typically by cold-forging. One problem with cold-forging copper (and copper alloys) is that the metal work-hardens - as it is forged, it becomes harder and more brittle, and it reaches the point where it will crack. The work-hardening can be removed by annealing the copper - heat the copper, and let it cool down. Rather than waiting for it to cool slowly, you can cool it quickly by dunking it in water, i.e., quenching it. This is important for the later discovery of how to harden steel. How long did all of this take? Native copper was being used by about 8,000BC, and by about 6,000BC, relatively large forged objects were being made using annealing.

The next step was smelting. Lead can be smelted at relatively low temperatures - an open fire is sufficient. However, the available evidence suggests that copper smelting developed before lead smelting. Almost certainly, copper smelting developed as an accidental discovery in pottery kilns, since open fires do not reach sufficient temperatures. Iron smelting requires even higher temperatures, and might have been accidentally discovered through using iron ores as fluxes in copper smelting - if higher temperatures than needed for copper smelting for accidentally reached, the iron ore could have been smelted, too. Copper smelting was developed around 5,000BC, and iron smelting may have developed as early as about 2,500BC, and became common around 1,000BC. Iron can be cold-forged, but is usually hot-forged. However, some work is easier to carry out while the piece being worked is cold, and even if hot-forging is usually used for working iron, cold-forging will still be used on occasion. Since iron will work-harden like copper, annealing will be used when iron is cold-worked (and it is still used today for this reason).

To produce hardened steel, it isn't sufficient to produce iron. You need to produce steel, either directly in the smelting process, or by converting iron to steel. The simple method is to reach higher temperatures than needed for smelting in your iron smelting furnace (a bloomery furnace) - at these higher temperatures, carbon will diffuse into the iron fast enough to give you steel as well as iron as the product of your furnace. This appears to already have been done on occasion by 1,000BC. If the steel is accidentally made, and isn't recognised as a distinct product, it will be used in the same manner as iron.

This gives us the 3 ingredients needed for hardened steel: iron smelting, steel-making, and quenching. For this to become a regular process, it needs to be recognised, and the required conditions identified. Hardened steel was being deliberately produced late in the 1st millenium BC.

So, how did people discover how to do these things?

1. These discoveries depend on earlier technologies. Copper working, annealing, pottery kilns, copper smelting, and iron smelting led to steelmaking and the quenching of steel.

2. Lots of time for experimentation and accidental discovery. Consider the dates above. Each step took a long time.

The final step, quenching the steel so as to harden it, is interesting because the result is the opposite of what quenching had been used for before. When copper alloys or cold-forged iron is heated to anneal it and then quenched, the goal is to make it softer. Quenching steel is doe to harden it.

Technically, tempering is the step after quenching, where the hardened steel is re-heated to reduce brittleness. Quenching makes the steel very hard, but also brittle. Re-heating, not to as high a temperature as it was heated to before quenching, but an intermediate temperature, will reduce that brittleness. It will also reduce the hardness somewhat, but the still will still be hard. Quenching only will give you very hard but brittle; quenching + tempering will give you hard and tough. Tempering is another step that must be discovered before quench-hardening steel is useful. A simple, but hard to control, method of tempering is slack-quenching, where you don't let the steel cool completely during quenching. If you only let it cool to the temperature you use for tempering, it will be automatically tempered.