I like the idea of:
Round 1 and 14: Warm
Round 2 and 13: Hot
Round 3 to 12: Seering
It goes from 8D4 (assuming it is not avoided or stopped) to 22D4. Granted, this nearly triples the damage, but to me, the spell heats up the metal and then cools it off. Extended, it should do something similar.
22D4 is 55 points of damage, but for a 3rd level equivalent spell that can be stopped in a wide variety of ways, that is potent, but not overkill (Extend should at least make it 16D4, double duration, double damage, just like Extend Melf's Acid Arrow). Fireball at 5th level can do more than that and a lot faster too, just not to one opponent.
Jumping into water will halve the damage. Except for half and full plate, most armor can be removed in 10 rounds (5 rounds if a friend is willing to burn himself with you). Resist Elements (or Protection From Elements) Fire and Chill Metal will neutralize it. Even Dispel Magic might work. Or, just a boatload of various Cure Wounds spells.
Somewhere around round 6 or 7, PCs would start going nuts if an NPC did this.
If this seems too potent, another possibility is:
1 Warm None
2 Hot 1d4 points
3–5 Searing 2d4 points
6 Hot 1d4 points
7 Warm None
8 Warm None
9 Hot 1d4 points
10–12 Searing 2d4 points
13 Hot 1d4 points
14 Warm None
The interesting thing about this is that the enemy sighs relieve and then it starts up all over again.
