Sodium metal reacts with water to form hydrogen gas and sodium hydroxide in an exothermic reaction. Exothermic reactions produce heat, and the sodium and water reaction produces enough heat to cause the hydrogen gas and the sodium metal to ignite.
Sodium hydroxide is commonly known as lye, which is a caustic substance that causes burns to the skin and eyes upon direct contact. Laboratory experimenters should limit the size of the sodium piece to that of a pea because of the metal's high reactivity, warns About.com. The addition of phenolphthalein, an indicator for bases, causes the formation of pink trails as the metal moves through the water during the reaction. These trails are due to the change in pH from the reaction creating sodium hydroxide.
Because sodium metal is highly reactive with water, most suppliers store sodium in mineral oil to prevent it from reacting with the water in the atmosphere. The reactive nature of the metal means pure sodium does not exist in nature, as it always reacts to form a compound when exposed to the environment.
Manufacturers use a process known as electrolysis to produce pure sodium metal. Salt is heated to the molten state and then an electrical current is applied to deposit the metal on an electrode. Once the electrode is removed from the molten salt, it must be quickly covered in oil to prevent conversion back into a salt.