Goblins of Arunia learned the art of smithing from the Giants and the Trolls. During the long dark ages of Trollish dominance, goblins were set to work in the great trollish foundries of the north. The eras of warfare between the fire giant kingdoms (most prominent of which was Pernag) led to a number of goblin slaves being taken by that people, and taught techniques deep in the earth. While goblin mastery of metal never reached the same heights as their gigantine masters, it was certainly transmitted with the former slaves after the fall of Pernag and the goblin revolts that led to the foundation of the old goblin kingdoms of Tsaphon and Negev.
As a result, goblin steel-making has its roots in those traditions. Goblin steel has much in common with the more potent sfyralto mavro, the gigantine pit iron or black iron. They share a number of forging techniques, though fire-giant iron is far more highly regarded.
Goblin steel has a smoky charcoal color to it, lending hobgoblin knights who wear it fearsome on the battlefield. Most large goblin settlements have a few master smiths (generally bugbears or hobgoblins) who know how to smelt and forge the special metal. Though goblins can forge regular steel, they much prefer this special variant.
Weapons forged from goblin steel tend to be slightly heavier (generally a half pound or so). Armor made from goblin steel is no different than most other armor, save for its menacing appearance. Goblin steel is more brittle than normal steel, and thus weapons are more likely to break on a natural 20 and armor is more likely to be damaged by critical hits.
Goblin Steel Items
Mace -- weighs 1 pound more, is 1 speed count slower, adds +2 to any severity rolls for critical hit determination -- if the C&T critical hit tables are not used, instead adds +2 damage on a critical hit.
Mail -- weighs 5 pounds more, affords slightly better protection against fire (+1 save bonus vs. fire-based attacks).
Plate armor -- weighs 5 pounds more, affords slightly better protection against fire (+2 save bonus vs. fire-based attacks).
Pit or black iron is forged solely by Fire Giants. All objects made of black iron are 50% heavier than any normal counterpart due to its immense density. It takes easily to various enchanting processes and advanced smithing techniques. The material itself also bears an innate enchantment due to the process by which it is forged: it is resistant to damage and fire, and remains cool even at temperatures of 100-150 degrees Fahrenheit.
Weapons made of sfyralto mavro deal an additional point of damage, add +2 severity to critical hits, and have +2 speed.