Structure
Carbon steel consists of two components: pure iron, in the form of ferrite, and cementite or iron carbide, a compound of iron and carbon. Cementite is very hard and brittle; its hardness is about 640 by the Brinell hardness test, whereas ferrite is only 200. The amount of the carbon and the cooling regime determine the crystalline and chemical composition of the final steel. In bulat, the slow cooling process allowed the cementite to precipitate as micro particles in between ferrite crystals and arrange in random patterns. The color of the carbide is dark while steel is grey. This mixture is what leads to the famous patterning of Damascus steel.
Since cementite is essentially a ceramic, this also accounts for the famous sharpness of the Damascus (and bulat) steel. Cementite is unstable and breaks down between 600-1100°C into ferrite and carbon, so working the hot metal must be done very carefully.
Read more about this topic: Bulat Steel
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