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In physical chemistry, and in engineering, steam refers to vaporized water. It is a pure, completely invisible gas (for mist see below). Pure steam (unmixed with air, but in equilibrium with water-liquid) has a temperature of around 100 degrees Celsius at standard atmospheric pressure, and occupies about 1,600 times the volume of liquid water (steam can of course be much hotter than the boiling point of water; such steam is usually called superheated steam). In the atmosphere, the partial pressure of water is much lower than 1 atm, therefore gaseous water can exist at temperatures much lower than 100 C (see water vapor and humidity).

In common speech, steam most often refers to the white mist that condenses above boiling water as the hot vapor ("steam" in the first sense) mixes with the cooler air. This mist is made of tiny droplets of liquid water, not gaseous water, so it is no longer technically steam.