For .223 you're going to need a minimum of 3/8" AR500 steel. You'll have to look around to find that grade of steel. Mild steel it will go straight through at that thickness. Mild steel of any thickness it is going to leave large pock marks and quickly destroy. A flat piece of steel isn't going to send much if any copper/lead fragments back at you. A target that has craters will.
Some pics from the private range I go to:
3/8" AR500 Steel, no divots from .223 and other rifles (Non-AP bullets only)IMG > IMG >
1" Mild Steel, large craters left by all rifle rounds.IMG > IMG >